A theatre in Burnham-on-Sea has been saved from closure after a council agreed to take over the lease.
Burnham Town Council has agreed to take on the Princess Theatre's running costs as it has agreed a 125-year lease with Sedgemoor District Council.
A transitional subsidy of £90,000 will be given to the town council from the district so improvements can be made to make the theatre more profitable.
It currently makes a loss of £2,000 per week. The deal starts in April.
The Conservative-led district council had initially wanted to close the theatre as it said it had run out of money.
During a full council meeting on Wednesday, the district council agreed to £1.4m in cuts.
Councillor Peter Burridge-Clayton, chairman of the group set up to arrange a deal, said: "The Princess is an excellent facility with great potential.
"With the improvements we have in mind and a marketing manager in place, I feel that exciting times are ahead.
"With more local input and ownership I am certain this can only mean a better future for the Princess and the benefit it provides for our community."