The Central Lakes Trust has approved a grant of $120,000 to restore the Millers Flat Bakehouse.
The building originally housed early bread-making ovens, a baking area and tearooms.
Once restored, the building will become a bakers' museum and will also be used for local artists and travelling exhibitions, as well as an information centre.
It is believed the bakehouse opened between 1904 and 1908. The outside will be restored as closely as possible to original condition and the inside will be whitewashed, in keeping with the decor of the times.
Millers Flat carpenter Geoff Pierce is waiting for approval to begin the work.
Trustee of the Millers Flat Bakehouse Trust Dennis Kirkpatrick is enthusiastic about seeing the ovens restored.
"I can remember working with a similar oven as a child in my father's bakery in Invercargill,'' he said.
Engineering firm Hadley Robinson has said the ovens can be fired. The work will be done under the guidance of Jackie Gillies, of Queenstown, a heritage architect.
The building is prominently located at Millers Flat, directly opposite the bridge into the town.
Chairwoman of the Millers Flat Bakehouse Trust Betty Adams said the bakehouse would be a fine example of an early 20th-century building and an asset to Central Otago once it was restored.
