The Greater Manchester Combined Authority has agreed to provide a £5m loan to Lancashire County Cricket Club towards the construction of a 150-bedroom hotel.
The four-star hotel would replace the current 68-bedroom hotel at the club's Emirates Old Trafford site.
A meeting of the 10 local authority leaders agreed the loan at a meeting on Friday 27 February from the Greater Manchester Growth and Growing Places funds.
The total cost of the hotel redevelopment is expected to be in the region of £12m. The club has already secured £3m through a retail bond launched at the end of last year.
A condition of the loan from the Combined Authority is that Trafford Council provide £4m of match-funding. Trafford Council is set to discuss the development at a meeting later in March.
Both loans will be subject to terms and conditions as well as interest up to the repayment date of 2021.
David Hodgkiss, vice-chairman of Lancashire County Cricket Club, said: "We are absolutely delighted that the Combined Authority has chosen to support this next phase of the development of our fantastic and historic 150 year old club after the success of our innovative Cricket Bond.
"The £5m financing from the Growing Places and Regional Growth funds reinforces our position as a leading member of the community for Trafford and Greater Manchester. As a community and benefit society, all of our profits are reinvested into facilities and employment that all benefit our residents and visitors.
"Alongside the funds raised through the cricket bond this is the next stage of financing to enable the development of a new four-star 150-bedroom hotel here at Emirates Old Trafford."
The architect on the scheme is Glasgow-based Ica.