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About £19 million is to be invested in the construction of a new building for the Library Theatre and the Cornerhouse, it has been announced.
Under the plans, the two cultural institutions will move to a single Manchester venue, which could open within three years.
The venue will feature five cinemas, a contemporary gallery space, a 500-seat theatre and education space, as well as a cafe.
Dave Moutrey, Cornerhouse chief executive, said: "We've both built up great support from our audiences and we have a strong reputation for innovation and collaboration - that's why this new development is so exciting for us."
He added that the challenge now is to "get the mix right" in the new Manchester venue.
The scheme will be funded from the £16 million already set aside for the Library Theatre relocation, plus a further £3 million from third parties and future capital receipts.
A Christmas Carol and A Doll's House are among the shows set to take place at Manchester Library Theatre this month.