Oldham Council has granted planning permission and listed building consent for the re-use and extension of the grade 2-listed Library and Art Gallery building to create a heritage centre and new theatre.
The project was designed by Mecanoo Architects with planning, development and heritage advice from Paul Butler Associates.
A spokesman for Paul Butler Associates said: "Once complete the Oldham Coliseum Theatre & Heritage Centre will have a transformational impact on this part of Oldham Town Centre. The approval of applications is a key milestone in the delivery of the Town's Cultural Quarter. The scheme will see the refurbishment and appropriate reuse of one of Oldham's most significant listed buildings, along with the provision of a brand new 550 seat theatre for the Town.
There were no objections to the application which was approved unanimously at Oldham Council's planning committee.
Subject to confirmation of successful funding bids to the Heritage Lottery Fund and Arts Council England construction is due to start on site in 2016.