The ROAR project had been entered into the People's Millions process, which is run jointly by the Big Lottery Fund and ITV, but did not win enough public votes after their work was featured.
But project workers announced yesterday that they would get their grant after all, when it was revealed their scheme was the runner-up with the highest number of votes.
ROAR, which stands for Rotherham Open Arts Renaissance aims to convert 5,000 sq ft of empty office space into low-cost artist's studios and community space – suitable for workshops and temporary events.
Spokesman Karen Sherwood said: "I'm delighted that Rotherham has still been awarded the money.
"I hope the new arts space will draw people into using the town and give something back to those in the creative world wanting space to work, exhibit and sell from, while encouraging beginners."