Middlesbrough Council has secured a £3.7m grant from the Heritage Lottery Fund (HLF) to restore the Town Hall in Corporation Road.
The council is putting £4m into the scheme which will turn the premises into a visitor "heritage" attraction.
Ivor Crowther, head of HLF North East, said it was a "stunning reminder" of the town's proud industrial heritage.
Parts of the Grade II listed building will be opened to the public, including the Victorian courtroom, cells and fire station.
The plans also include the development of a new cafe, bar, and a new community space.
Work is expected to get under way in January and the Town Hall is scheduled to be closed for nearly two years, the council said.
Middlesbrough's deputy mayor Dave Budd said: "The Town Hall is the jewel in Middlesbrough's crown and this project will restore it to its full majestic glory."

Benjamin Herman, 80, of Hook, Hampshire denies four counts of sex abuse against a girl under 13 in the early 1970s.
Blackfriars Crown Court heard he drove her in his VW camper van, past security into the palace forecourt.
Mr Herman was an equerry to the duke and had an office in the palace.
He faces three counts of indecent assault on a girl under the age of 13 and one count of indecency with a child between January 1972 and January 1974.
Edmund Gritt, opening the case for the prosecution, told the jury Mr Herman held the equerry post between 1971 and 1974, managing the duke's official diary and accompanying him on official visits.
The abuse is alleged to have taken place at a house in south-west London used by military personnel, where Mr Herman was living at the time.
Mr Gritt said the girl was "lonely and needy for adult attention but was nevertheless unhappy with the sexual attention he gave her".
He told the court that in the 40 years since, she had told friends about what had happened, but first contacted the authorities after revelations about Jimmy Savile emerged.
Giving evidence, the woman recalled feeling "privileged" when she was driven around the palace forecourt.
She told the jury that Mr Herman discussed his relationship with the Royal Family.
"He told me that he often had charge of Prince Edward and Prince Andrew and he played football with them," she said.
She told the court of four occasions on which Mr Herman allegedly abused her in his home and in a nearby garage.
Nerida Harford-Bell, defending, said: "I'm going to suggest that what you told the jury is all untrue. It may well be a fantasy that you built up about Mr Herman."
The woman replied: "Well, it's not a fantasy at all."
The trial continues.
Plans for a £7.7m revamp of a 120-year-old council building have been given the go ahead.
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A former personal assistant to the Duke of Edinburgh accused of sexually abusing a young girl took his victim on a visit to Buckingham Palace, a court has heard.