Congleton Leisure Centre is set to receive an £8.5m refurbishment which could include a pool facility, community space and an improved skate park.
A meeting of Cheshire East Council's cabinet has authorised work to begin on developing a detailed business case for the Hankinson's Field site, which will consider all options including refurbishment and new build.
The project board has also been told to review the financial structure for the £8.5m scheme and to explore alternative financial delivery models to find the best overall solution for local residents.
Since last summer a public consultation exercise has been ongoing, including public meetings held jointly with Congleton Town Council and Congleton Partnership, and a survey which attracted more than 500 responses.
Residents said they wanted the existing leisure centre at Hankinson's Field to be modernised or replaced but there was no strong desire for it to be relocated to the town centre or for the centre to offer a wider range of services.
Lorraine Butcher, executive director of strategic commissioning at Cheshire East Council, said: "Hankinson's Field is highly valued by the residents of Congleton. Therefore, we are outlining the next steps required to optimise this fantastic asset and to deliver 21st century facilities for the benefit of residents on that site.
"To ensure the successful delivery of this and maximise opportunities for the site, Cheshire East Council is committed to working with sporting clubs and park users, including Congleton Rugby Club and Friends of the Park."
The centre is managed on behalf of the council by Everybody Sports & Recreation. According to a report to the council, the building is not as energy efficient and its layout does not comply with current design standards. A new pool building and refurbished exterior walls for the sports hall "would make the building more aesthetically appealing", with an improved skate park, landscaping and planting increasing the biodiversity of the site.