The Heritage Lottery Fund has earmarked £2.42m for the restoration of the Roundhouse in Camden.

The Roundhouse, a Grade II listed building, has fallen into disrepair since it closed in 1983. The Lottery Fund money will help to turn the old Victorian railway shed, built in 1846, into an adaptable performance space and creative education centre.

Major redevelopment work will take place on the building and roof, and the circular glazed roof-lights will be reinstated to allow the public to see interior daylight for the first time in over 100 years. Plans also include building a glass-fronted atrium, and a new wing to house a studio theatre, bars and restaurants. The creative education centre for 13 to 23 year olds aims to give young people from all backgrounds the chance to explore their creative potential.

The Roundhouse Trust, set up in 1996, has been working to transform the once legendary venue into a multi-media performance space that is once again an important attraction for Camden. So far they have raised £13m of their £25m target. We are thrilled by the news of this contribution, said Marcus Davey, chief executive of the Roundhouse. It is a significant boost to our 'Rebuild the Roundhouse' campaign, and means that we are able to provide a much-needed resource for the local community.

In its prime in the 1960s The Roundhouse played host to concerts by The Rolling Stones, Jimi Hendrix, The Who and Pink Floyd, while in the 1990s enormous raves and productions as diverse as The Royal National Theatre and Stomp were staged in the building.

Sue Bowers, the Heritage Lottery Fund's Regional manger for London said: We are delighted to have earmarked money for this visionary project. As one of Camden's landmark buildings, the Roundhouse is central to the local heritage and cultural of this vibrant and diverse part of London.

The Trust plans to start work in autumn 2002, and reach completion two years later.