The oldest surviving theatre in NSW was one of 23 projects to receive funding as part of the NSW Government's $72 million Creative Capital program.

Minister for the Arts Ben Franklin, who was in Newcastle on Tuesday for the announcement, said the upgrade would transform the Victoria Theatre into a world-class cultural asset, adding that plans were "on track" to return performances to the theatre "within 12 months".

"This project will cement Newcastle as a top destination for the arts in NSW and provide new opportunities for audiences to enjoy dynamic creative experiences in world-class cultural infrastructure," Mr Franklin said.

The Victoria Theatre was the city's first purpose-built theatre when it opened in 1876. It was converted to a movie theatre in the 1930s and ceased operating as an entertainment venue in 1966. Century Venues purchased the boarded-up building in 2015, keen to restore it and re-open as a working heritage theatre.

In 2020 a "Campaign Cabinet" of Newcastle citizens formed, committed to working together to secure funding to re-open the theatre. Out Of The Square Media founder and director Marty Adnum was one of them.

"When the building went up for sale we had concerns about it being developed without any empathy, but when Century came along we breathed a sigh of relief," he said.

"Funding of $4 million is a great step forward for the theatre.

"That whole entertainment precinct concept - at the one end we have the Civic Theatre and Playhouse and at the other end, the Victoria - is going to be tremendous. And the timing is just right, with Kingsley and QT opening in the city."

The theatre has housed some "small-scale, well-controlled events" in recent months to showcase the site's potential.

"By no means is the revitalisation complete, hence the funding is needed, but if it had stayed completely shut no one would have an appreciation of what can be achieved there," Mr Adnum said.

Newcastle playwright Carl Caulfield, who staged a performance at the Victoria Theatre in January called An evening with Carl Caulfield & 'The Vic' history with Gillian Arrighi, was "delighted" to hear about the funding.

"My play Creativity has come out of a profound sense of disaffection in the arts community following two years of COVID and philistine-like cuts at a federal level," he said.

"News of this funding - of people putting money back into these beautiful buildings - offers us hope that we can use the arts for what it's intended to do, which is to inspire, to act as a kind of panacea against all the bad things in life.

"It's as valuable as breathing."

Executive director of Century Venues, Greg Khoury, described the NSW Government's capital investment into the Victoria Theatre's revival as "trailblazing" and said it will change the way that theatre infrastructure can be delivered in NSW.

Go online to create.nsw.gov.au for information about the Creative Capital program.

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