Architects' impressions have been revealed after the Heritage Lottery Fund provided development funding of a new Heritage Centre and Coliseum Theatre.
The initial grant of £615,000 and will support a second-stage bid for a total of £3.9m.
The regeneration scheme seeks to bring together the existing library, Gallery Oldham and Lifelong Learning Centre with new heritage, arts and leisure facilities.
The plans include development of a new Oldham Heritage Centre housed in the former Oldham Library and Art Gallery on Union Street.
The refurbishment of this grade 2-listed building would enable it to become a new base for the Local Studies and Archives Centre and museum collections.
A separate grant application to Arts Council England Fund is in and will be put towards a new-build Oldham Coliseum Theatre, with a new auditorium, if approved.
The theatre would be sited on the current car park on Southgate Street with its front-of-house operations, education and administrative functions based in the Heritage Centre. A decision is expected in January 2013.
The development would be located next to the forthcoming Metrolink line.
Cllr Jim McMahon, Oldham council leader, said: "The wider regeneration scheme we're planning here is inspiring because it will bring all our cultural jewels together in one place, significantly enhancing our leisure, arts and heritage offer and providing yet another significant catalyst for wider regeneration of our town centre.
"This is a perfect location for a development of its kind and offers huge potential benefits for local residents, businesses and visitors alike.
"When you put this alongside plans for the Old Town Hall to become a cinema with restaurants and cafes you can see Oldham Council is deadly serious about providing facilities that attract a new kind of visitor here – and inspire a greater sense of pride in our town centre.
"After more than a year of hard work behind the scenes it is exciting to finally be able to go public with these plans."
Sara Hilton, head of HLF North West, said: "Oldham has a fascinating industrial past and these innovative plans for a heritage resource centre will help bring that story to a whole new audience.
"The project has the potential to transform the town's old library site into a centre for learning, leisure and social enterprise."
The architects were London-based Levitt Bernstein.