The money means phase one of the £28.5m transformation of the neglected Grand Theatre in Leeds will start in the summer.
It will secure a permanent home for Opera North, the country's most successful regionally-based opera company.
The first phase of the three-part scheme, costing about £20.6m, will benefit audiences and performers, with new seating, improved ventilation and air cooling. Acoustics will also be improved, as well as access for disabled people.
A lorry lift will be installed to accommodate even the most ambitious scenery and equipment and there will be improved rehearsal rooms, a new raised scenery flying system and a deeper orchestra pit.
Everyone connected with the Grade II listed theatre, which is owned by Leeds City Council, was delighted yesterday and looking forward to the day it is restored to its Victorian splendour.
Sir Christopher Frayling, chairman of Arts Council England, said: "I am delighted that the Arts Council is able to confirm this award.
"Opera North is one of our finest opera companies and the Leeds Grand Theatre is now set to become a national centre for excellence. The award will breathe new life into a very significant arts venue."
Opera North's general director, Richard Mantle, said: "Opera North is one of the country's foremost performing companies and we're overjoyed to consolidate Leeds as our permanent home. It's absolutely vital for us to be based in such a vibrant city and we look forward to moving into our new purpose-designed opera centre next year
"This project has been close to our hearts for a long time now and our fundraising efforts have been given a real boost by this news.
"We are excited at the prospect of this wonderful restoration, which will be both an inspiration to our artists and a fantastic opportunity to broaden access to the arts for all in Leeds and across the region."
Coun Ronnie Feldman, chairman of Leeds Grand Theatre, said: "This Lottery award is terrific news for Leeds Grand Theatre, our visiting national and international performers and our loyal audiences alike."
Coun John Procter, Leeds Council's executive member for leisure, said: "The Arts Council award is tremendous news and puts the Leeds Grand Theatre and Opera North firmly at
the forefront of national cultural life.
"It will breathe new life into one of Yorkshire's greatest artistic and entertainment assets and will also create a national high-profile centre for excellence in opera."
Work on the project is expected to start this summer and the
theatre will reopen in summer 2006. Grant applications are underway for the second phase of the project, which will focus more on providing access to
and enjoyment of the many heritage assets in the theatre buildings.
The neglected second auditorium, the Assembly Room, which has been closed to the public for decades, will become a new 350-seat venue.
andrew.robinson@ypn.co.uk