The Minister for Regeneration says 'new life' could be breathed into Barry Island as a tourist destination.
Huw Lewis AM said: "The way people spend their time and money is different from the 1960s and 70s, but people are still looking for a quality day out. Barry has a fine beach... we need to make sure the facilities are here to match the natural environment."
The first tranch of a £3.3m investment from the Welsh Government has been announced, focusing on Barry Island.
The money will be used to regenerate the eastern half of the seafront and the old Butlins site.
The announcement of funding to help regenerate Barry Island comes in Tourism Week, with the industry campaigning to highlight the impact they have on Welsh economy. Nearly 10% of all jobs in Wales are in the tourism sector and it's worth an estimated £6.18 billion.
With a new tourism strategy for Wales being developed by the Welsh Government this year, it's important that the industry's voice is heard loud and clear. We have a superb tourism product here in Wales, but we need to make politicians and the public aware of just how important the industry is to the nation's long term future.
The Welsh government is announcing funding of £692,000 to start the regeneration of Barry Island. At the former Butlins site a space will be created to host local events and a temporary car park will be built. Some money will also be used for designing further improvements to the holiday resort.