The Welsh Government has committed £7 million towards a new leisure centre in Newport.
Newport City Council approved plans to replace the current Newport Centre site with a new £90 million Coleg Gwent campus in February.
A new leisure centre will now be built on the vacant site next to the University of South Wales' City Campus by the River Usk, according to the council's plans.
The local authority said the purpose-built centre will provide state-of-the-art facilities for residents.
On Wednesday, a council spokesperson said the Welsh Government has now committed £7 million towards the project as part of its £110 million Transforming Towns programme.
Deputy minister for housing and local government Hannah Blythyn MS said: "This is an exciting project which will create a fantastic new leisure facility for Newport.
"It’s part of our £110m Transforming Towns programme, which is focused on redeveloping and improving our towns and cities, and I look forward to seeing this development progress in Newport," Ms
Leader of Newport City Council Jane Mudd described the development as "fantastic news" and thanked the Welsh Govenment for "recognising the importance of a new leisure centre to Newport".
Councillor Mudd said: “Together the centre and the campus represent a public sector led, multi-million investment in the city centre.
"As well improving the lives of people in the city, the developments will have wider regeneration and economic benefits."
A council spokesperson said a public consultation attracted widespread approval for the plans.
Last month the council's cabinet agreed to proceed with the new leisure centre as well as to dispose of the Newport Centre site to Coleg Gwent.
Final proposals and designs are now being worked on ahead of the submission of a full planning application which is expected later this year.
As well as the Welsh Government funding, the £19.7 million cost of the project will be met by the council and savings from the subsidy paid to Newport Live.
