Theatre staff and supporters were celebrating after the Lottery Grants Board gave $750,000 towards the theatre redevelopment, completing a fundraising effort which galvanised Dunedin.
"It's just fantastic news. It's incredibly exciting," Regent Theatre manager Sarah Anderson said yesterday.
"The ... decision reflects the support of the whole community behind us. The support Dunedin has shown for the Regent was very important in their decision-making."
Ms Anderson expressed particular gratitude to the "Help Save the Regent" campaign organised by the Allied Press community newspaper, The Star.
The Otago Theatre Trust had raised just $275,000 before the campaign started, but within three months it had soared to $2 million.
The Star Regent Book Sale and Star Regent Variety Concert also significantly boosted fundraising efforts, she said.
"We're absolutely thrilled at this news," The Star editor Helen Speirs said yesterday.
"The whole Dunedin community really got behind our `Help Save the Regent' campaign and we're sure that support helped sway the funding decision. This will enable the Regent to add more to its redevelopment wish list."
Chief executive Keith Ellwood said the overwhelming community support for the theatre was also a factor in the Otago Community Trust's grant of $750,000 in May.
The funding request was met in full "simply because of the very significant public support that has been evident in the fundraising campaign", he said.
Regent Theatre Trust chairman Mike Shield said everybody in Dunedin who helped with the fundraising campaign should take some credit for the announcement.
"It's really brilliant news and it's a great reward for everybody for a lot of hard work behind the scenes. We had to show that we had the support of the people in the community and the council and we've certainly done that," he said.
"The project is now well and truly under way and this means we can go on and do work like painting the auditorium and finishing the dressing rooms at the same time as the other work."
The trust appealed to the theatre owner, the Dunedin City Council, for help this year, saying the Regent could no longer meet technical or safety aspects of modern stage productions.
The council agreed to contribute $350,000 for upgrade design work and $4.4 million for construction work, conditional on the trust raising $2 million for the auditorium upgrade.
The first production booked into the theatre after the redevelopment is Southern Opera's Tosca, on August 2 next year.