Cherwell District Council has given £50,000 to the St Mary's Church appeal in Banbury.
The donation was approved at a special meeting of the council last month.
St Mary's, the town's parish church, is undergoing renovation and improvement work costing £1.5m.
A lottery grant for £1m meant the church had to raise £500,000 itself.
St Mary's will become a major cultural venue with a stage and other facilities for concerts and plays. With 880 seats, it will be the biggest auditorium in north Oxfordshire.
The £50,000 cheque was handed over on Monday by Cllr George Reynolds, the leader of the council, left, to Sir Frank Davies, the appeal committee chairman, right. Also pictured is Cherwell's chief executive Grahame Handley.
Cllr Reynolds said: "This is an investment in the historic heart of Banbury. Having adopted a strategy to enhance cultural opportunities, we have policies aimed at improving the built environment, maintaining heritage and enhancing the vitality of urban areas."
Sir Frank said: "As we're nearing our target it's getting harder to raise funds as most of our friends have already given.
"We believe the council is very farsighted. They want a venue for concerts and other large events but to build one that could compare with St Mary's would require many millions of pounds."
The appeal is now less than £100,000 short of its target.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereComments are closed on this article