The West Yorkshire Playhouse is to receive a cash boost of almost £1.5m to help to develop the venue and ensure its long-term future.
The Leeds theatre will receive the money from the Arts Council as part of an Action Research Scheme, and the funding will be used to develop its programme of events as well as examining the way it functions as a business.
The Playhouse is one of only a handful of arts organisations nationally chosen to receive the grants, with London's Lyric Hammersmith, Rambert Dance Company and Battersea Arts Centre also benefiting.
Chief executive Sheena Wrigley said: "It is essentially a research and development grant. At the Playhouse we work within very tight margins, there is very little room for flex.
"This grant gives us the opportunity to step back and look at what we can do better as an organisation, what our strengths are, how we can improve. It is about revitalising and reinvigorating the theatre for our audiences."
Ms Wrigley added: "It is fantastic news for the region and great news that some of this Arts Council funding has come to Yorkshire."
The grant follows more than six months of campaigning by Ms Wrigley and artistic director Ian Brown to secure the funding.
The cash is extra to the regular funding the Playhouse receives from the Arts Council and will be spent over the next two years on productions, training, consultants and staffing.
She added: "What it does is give us breathing space. The Playhouse is a victim of its own success. The theatre is very dependent on ticket sales, which means we are in a constantly precarious position – one poor show has serious consequences. This funding means we don't have to concentrate solely on the next production, but can take a step back and look at how we can make sure the theatre has a bright future."
She admitted that some may be surprised at the investment, given the constant message of the past 12 months that the arts are in danger. She added: "This gives the theatre no guarantee of funding in the future, nor is it an addition to our regular funding. We need to keep campaigning for that and making sure we are properly invested in. This will simply give us the opportunity to see how we can become the best organisation we can be."