Arts Council England has awarded Manchester City Council £5.5m to build HOME, the arts centre due to contain the relocated Cornerhouse cinema and Library Theatre.
The new venue within Ask Developments' 20-acre First Street is due to open in spring 2015.
There will be a 500-seat theatre, 150-seat studio space, 5,000 sq ft gallery, five cinema screens and digital production and broadcast facilities, as well as café bar and restaurants.
Manchester City Council has committed £19m to fund the creation of HOME. The overall budget for the projected is £25m. The remaining £6m of the cost is due to be funded by a combination of another Arts Council England grant and fundraising.
HOME was designed by Mecanoo and is being built by Wates.