The North West Development Agency has awarded £3.75m to help regenerate the Freckleton Street area of Blackburn town centre.
The grant will be provided to Blackburn with Darwen Council over three years to deliver office and light industrial space together with community-focused services.
A new £10m road bridge over the railway is being constructed by the council and is due to be completed in April 2008. The NWDA investment will help deliver a new route, which will link the bridge to the junction of Montague Street and King Street.
Developers will be sought by the council to take on surplus land and disused buildings within the area.
The NWDA funding is matched by £7m from Blackburn with Darwen Council.