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The Bristol Old Vic's plans for the front of the theatre will now go out for public consultation.
Planning permission will also be required before any building work can start.
The Theatre Royal, Bristol, home to the Bristol Old Vic, has revealed plans for a £12m redevelopment of the front of the theatre in King Street.
It wants to tear down the 1970's brown brick building to the left of the theatre's entrance, to make a walk-way to the auditorium, which is set back several metres from the road.
Cooper's Hall, which houses the foyer, would be returned to its original use as a banqueting hall on the first floor, and the Studio space would move to the ground and basement levels of the Victorian building.
The scheme will cost £12m and the Arts Council England has promised £5m. The theatre also hopes to receive funding from Bristol City Council, with the rest coming from donations.
It is the world's oldest continuous working theatre and the auditorium and backstage area has recently undergone a multi-million pound transformation.