The council unanimously passed a motion at Monday's night ordinary meeting for Valentine Hydrotherapy Pools Incorporated to be provided with a $10,000 grant in 2019/20, an annual rent reduction of $3675 and waved council rates of $7250.

It will also commence formal talks to takeover the 54-year-old facility subject to the return of two due diligence reports early next year.

The charity has also surrendered a long-term lease of the council land the centre occupies for a new two-year lease with the option of an additional three years as part of the agreement.

Management had expressed its concerns to the Newcastle Herald in recent weeks that the centre would likely close next winter without a council takeover.

VHP Incorporated secretary John McGrath said management had approached council about a takeover last August, hoping to run the centre for two years until the process could be completed.

He said aging volunteers, dwindling volunteer numbers and upcoming infrastructure replacement costs had left management with little option but to seek a takeover to ensure the centre's long-term existence.

Mr McGrath said on Tuesday the $10,000 grant would be a significant boost for the short-term operation of the centre but management remained hopeful council would takeover.

"We're enormously pleased," he said. "It is going to provide us the room we need financially and momentum. We will continue negotiations with them."

Cr Adam Shultz, who moved an amendment backing a takeover that was deferred at the previous standing committee meeting, said the $10,000 grant would "ensure the facilities remain open in the short term".

"This isn't the penicillin to cure the predicament that Valentine Hydrotherapy Pools is in, but it does give a reprieve and some breathing space," he said.

"Nobody wants to see this facility close, least of all councillors and staff.

"We're trying to ensure that this viable community facility stays open.

"By February we should be in possession of the due diligence report and we can make an informed decision at that time."