Arts Centre to get pounds 3.1m ACW grant.
The lottery grant, the largest made by the ACW in North Wales, will give Wales an international lead in applied arts. The new complex, on the site of the existing craft centre, will cost pounds 4.3m.
Denbighshire county council has earmarked pounds 480,000.
Once the remaining funding from bodies including the European regional development fund, Welsh Development Agency and Wales Tourist Board is in place it is hoped to start work next autumn.
Philip Hughes, director of the craft centre, said: "The pounds 3.1m grant from the Arts Council means we can realise our dream to give the people of Denbighshire a world-class craft centre that will benefit the whole nation of Wales.
"The improved venue will provide a unique platform to show inspirational international applied arts. This award is a vindication of our programme of access to excellence for all," he said