The Heritage Lottery Fund has announced a £2.3 million investment to restore Pontypridd's historic Lido in Ynysangharad War Memorial Park.
Rhondda Cynon Taf County Borough Council will use the funding for a new complex, which will include three heated pools and a covered children's play area.
The Grade-II listed Lido was built in 1927 and was considered to have one of the largest open-air swimming pools in Wales. It could accommodate up to 1,000 people in its heyday.
Jenny James, the first woman to swim the English Channel, trained there and it was also visited by Welsh singer Tom Jones.
During the post-war years the Lido remained a popular attraction but in the 1980s the complex fell into decline and was finally closed in 1991.
Ynysangharad is the only listed lido to have survived in Wales and one of only 14 with architectural significance left in the whole of the UK.
The project will cost £6.2 million in total, and the Council said it would work with the Welsh European Funding Office to secure the remainder of the money needed for the revamp.
But locals are said to be divided on the new project with some people arguing that an outdoor, heated pool is not the most cost-effective idea and there shouldn't be an entry fee for the site.
Many also claim there has been a lack of public consultation on the plans.