Plans for the £28m redevelopment of the Everyman Theatre in Liverpool have been given the green light after Arts Council England (ACE) agreed to contribute £12.8m towards the scheme.

The Liverpool and Merseyside Theatres Trust (LMTT) is behind the proposals for the first major refurbishment of the 45-year-old venue since the 1970s, which forms the first phase of a combined scheme that will also include the upgrade of the Playhouse theatre. Designed by Steve Tompkins of Haworth Tompkins Architects, the project will include the creation of a new 400-seat auditorium, the recreation of the Everyman Bistro and a new 'creative hub' for writers, as well as dedicated space for schools and community groups and rehearsal space and production workshops.

Front-of-house, catering and bar facilities will also be upgraded as part of the scheme, which is now set to move to the detailed design and planning stage in a bid to enable work to get underway in spring 2011. The revamped Everyman is expected to reopen in 2013. Professor Michael Brown, the trust's chair, said: "This is a far-sighted and forward-thinking commitment from our stakeholders which reflects the importance of high quality culture to the image, the quality of life and the economic growth of Liverpool, Merseyside and the North West.

"The new Everyman will be a powerful signal that Capital of Culture 2008 was not an end in itself but the beginning of a new era for this uniquely creative city." In addition to the ACE grant, LMTT aims to secure £3m from the Northwest Regional Development Agency and £6m from the European Regional Development Fund, as well as confirming support from Liverpool City Council. A public fundraising campaign is also expected to be launched in order to raise a further £2m.

Aileen McEvoy, executive director for ACE, North West, added: "The Arts Council's investment of £12.8 million will firmly secure the future of producing theatre in Liverpool and will allow it to continue to play a major role in the continuing transformation of the city into an international cultural centre."