Newcastle has announced plans to earmark £600,000-a-year for cultural projects.
Newcastle City Council was criticised by stars such as Sting, Mark Knopfler and Bryan Ferry when it announced last year budgetary pressures meant it had no cash for the arts.
The budget, which is being debated on Wednesday, has found £600,000-a-year for arts subsidies.
Leader of the Labour Council Nick Forbes said the money for the Newcastle Culture Fund came from a range of sources including public health funding and income from a loan to Newcastle Airport.
– Councillor Nick Forbes, Leader of Newcastle City Council
"I'm tremendously excited by the progress made on the Newcastle Culture Fund. It's an example of what can be achieved when organisations like ourselves, the Arts Council and cultural venues come together and think differently.
"We are on the final straight, and if full council agrees the plan later this week, we should be able to get the fund running within two months.
"The value of arts and culture to Newcastle has never been in doubt; what has been in doubt is the funding to support them. This new approach not only provides that security, but means those who wish can also make a contribution."
The council will also pursue a partnership with Newcastle University where savings generated from shared services between the university and the council will be reinvested in the cultural life of the city.
The turn-around has been backed by the Arts Council England.
– Peter Bazalgette, Arts Council England chairman
"The Arts Council is grateful for the way in which the City Council has worked closely with us to broker this new funding package for key cultural venues. But, of course, a 50% cut to the culture budget still means serious economic and social impact for Newcastle and beyond."