Oxford City Council has agreed £500,000 of funding to renovate the Bullingdon Community Centre in the Lye Valley.
The work will see the hall replaced and the building enhanced.
The hall, which was built in the late 1940s by local residents, is a prefabricated structure with walls made of concrete blocks.
In August a structural engineer carried out a survey of the space and concluded it was no longer fit for purpose.
Oxford City Council has installed props to make the hall safe to use, and agreed at its February budget meeting to provide the new funding.
The City Council is working closely with Bullingdon Community Association, which runs the centre on behalf of the City Council, to shape a scheme.
The association is set to carry out a consultation with local residents about what people would like to see in the new facility.
Building work is expected to start early next year.
The centre and its outdoor facilities, including the all-weather games area in Peat Moors Recreation Ground, are regularly used by 14 groups and about 400 people.
Users include parent and toddler groups, Studio Theatre Club, Orinoco Scrapstore, ORK Martial Arts, junior football teams, groups for the over 60s and the 7 O’Clock Club, which has been meeting at the centre for more than 50 years.
The work follows the creation of the £4m Rose Hill Community Centre last year and the upcoming £2.3m improvement of East Oxford Community Centre.
Oxford City Council owns 19 community centres across the city, and directly runs three: Blackbird Leys, East Oxford and Rose Hill.
Richard Bryant, Bullingdon Community Association secretary, said: “The trustees are delighted that Oxford City Council has recognised the need to renovate the community centre. The proposal to spend £500,000 exceeds our expectations.”
Councillor Christine Simm, Executive Board Member for Culture and Communities, said: “Community centres are the heart of a community; they bring people together, host events and organisations, and provide vital local services.
“Oxford City Council is committed to improving community facilities across the city, and I am delighted that we have found the funds to improve Bullingdon Community Centre.”