Thame has been given £1.5m for a fitness centre to be built with the swimming pool development.
The move by South Oxfordshire District Council was greeted with delight by the man whose campaign has led to the pool project starting.
Former mayor Mike Le Mesurier said: "It has been a nailbiting end to the whole process of getting the pool and leisure complex set up. We were worried right up to the last moment that the money might never materialise.
"We are delighted to welcome the district council's contribution to a major facility for Thame."
Development around Thame sports and arts centre in Oxford Road will mean the addition of the swimming pool, the current fitness centre becoming a dance studio, a brand new fitness centre and an improved entrance way and community facilities.
Thame Town Council is paying for the pool with £4.1m of the £7.2m it received from selling Pickenfield public land for housing. The rest will be invested and the interest used to run and maintain the pool so no cost falls on council taxpayers.
Work is ready to start on both projects with the fitness suite being ready in January and the swimming pool by August next year.
Thame's foresight was praised at the district council meeting where all members acted as trustees of the community trust fund which is giving the money.
Member Tim Horton said Thame needed the district council's contribution so that invested money would run the pool in the future.
Thame's deputy mayor, Mike Welply, told the meeting: "You have been party to everything involved in the protracted negotiations to get this pool for Thame and your contribution to the fitness suite is important.
"Without it Thame would have to foot the bill for the whole development and there would not have been enough left in the kitty to finance maintenance."
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