Saltdean Lido is to receive £2.3 million towards the cost of restoring the pools and outside spaces.
The funding will be used to help create a unique tourist and leisure destination and community hub, creating 60 jobs.
Rebecca Crook, who chairs the Saltdean Lido Community Interest Company (CIC), said: “Today’s news is a massive boost for both the lido and our local economy.
“We will now be able to restore and refurbish the pools and outside area and provide local residents and visitors with a beautiful place to swim, relax and enjoy being outside.
“I would like to thank the volunteer directors of our group who continue to dedicate hours and hours to restore this unique space and also our local MP Simon Kirby who has supported the project from the outset.”
Mr Kirby, the Conservative MP for Brighton Kemptown, said: “I am delighted to be able to announce today (Monday 26 January) that the lido will benefit from an additional £2.3 million funding which will make a huge difference.
“I have been working hard to secure this funding.
“I would also like to again pay tribute to the work of the CIC and also to the many local residents who have supported this campaign.”