Children's TV broadcaster Nickelodeon has signed a licensing deal with Blackpool Pleasure Beach to build a six-acre theme park at the attraction.
The £10.3m Nickelodeon Land will feature 14 rides, including nine new and five existing rides which will be extensively re-themed.
Blackpool Council has agreed a £5m loan with the Pleasure Beach secured against its assets to help deliver the project. The loan will be repaid over seven years at a commercial rate of interest.
Nickelodeon is a joint venture between BSkyB and MTV Networks International, part of Viacom. Its brands include Sponge Bob Square Pants and Dora the Explorer.
Cllr Peter Callow, leader of the council, said: "This is a fantastic day for the Pleasure Beach and for Blackpool as a whole. As a town we need to keep changing and introducing new attractions that will make visitors come to Blackpool, stay in Blackpool and keep coming back.
"Last month a study showed that 19,200 jobs on the Fylde Coast exist as result of tourism and there is no doubt that the Pleasure Beach contributes significantly to that figure both in terms of direct employment and the knock on effect to local businesses.
"Nickelodeon is known across the world and for Blackpool to be the first place in the UK with their attraction is a landmark achievement. This Council aims to make Blackpool a family friendly resort and the Nickelodeon brand ties in perfectly with our objectives."
It is predicted that the project will increase visitor spend and generate 274 net additional jobs and £8m of Gross Value Added each year after 10 years of operation within the regional economy.