The outdoor pool at Albert Avenue Baths was last used for public swimming in the late 1980s.
Extensions will be built to house an enlarged gym and fitness studio and there will also be an internal refit of mechanical and electrical work to bring the building up to modern standards.
The renovated facility will join the small list of outdoor swimming pools in Yorkshire, including Ilkley Lido, which attracts up to 150,000 visits a year, and pools at Ingleton and Helmsley.
Councillor Dave Craker, Portfolio Holder for Leisure and Culture said: “Albert Avenue Pools will follow in the footsteps of Ennerdale Leisure Centre, completed early in 2020, and Beverley Road Baths which is currently undergoing a full refurbishment, in providing the best possible facilities for our residents.
“The council is incredibly passionate about investing into our communities and I already know the centre will be really appreciated and loved by its users for years to come.”
At the height of lido culture in the 1930s, Britain had more than 300 outdoor pools. There are more than 100 lidos in the UK, with a number of renovation projects in the pipeline.
The work at Albert Avenue will begin once Beverley Road Baths reopens to the public later this year.