Leeton Shire Council have the green light for the plans to go ahead at its June monthly meeting on Wednesday night.

However, certain parts of the project will only be able to go ahead if more funding can be accessed.

Council will now proceed to the development application process and fundraising of an extra $2.7 million and, if no or insufficient grant or philanthropic funding is forthcoming in time, it will stage the development and borrow up to $631,100 over 20 years to complete stage one by December 2021.

If this is the case, council will continuing to seek grant or philanthropic investment to deliver stage two at a later date.

Stage one would include the inclusion of new foyer areas, accommodating up to 145 people, a new box office area, an increased stage capacity, two new dressing room levels, a prep kitchen and a big revamp of the main auditorium area.

This work will also involve bringing the theatre up to code in certain areas.

The plans are also waiting on tick of approval from the relevant heritage authorities.

Council's director of operations Peter Keane told Wednesday's meeting the race would now be on to ensure the project is delivered on time as per conditions imposed by the state government after it initially supplied almost $4 million for the redevelopment.

"We anticipate construction will start in January next year," he said.

"We're in close contact with the funder (the NSW government) and they are happy with where we are up to.

"They have been very insistent we do not drop that date (December 2021). They are fully committed to the project.

"They like what we are doing."

Improved sound and lighting, better disability access to the theatre and improved sight lines for the audience are all on the work program agenda in stage one.

Council's updated 2020-21 budget now allows for the full borrowings for stage one ($500,000 plus $631.000), which is expected to cost about $379,896 in interest over a 20-year loan period.

Annual repayments will be $75,550 (two payments per year) dependent on the interest rate available at the time the loan is taken out.