New play equipment will be built on the site of a Lincoln youth centre which was destroyed by fire last year.
St Giles Community Centre, next door, will also become the new home for enhanced activities for children and young people as part of a joint-council project.
In the months following the attack, groups have been supported by alternative venues like the community centre.
Lincolnshire County Council and City of Lincoln Council have worked together to come up with the new service provision.
Councillor Martin Hill, Leader of Lincolnshire County Council, said: “It makes sense to use the present community centre which is next to where the old youth centre stood.
“The variety of space can be used by young people for community group activities and our Positive Futures team who also provide activities for young people. Groups who used the old building can still access a local venue virtually on the same site and this won’t impact on community groups who already use the centre.
“Money used to support running a youth centre building will be ploughed back into providing services instead. Plus we’ll be resurfacing the multi-use games area and providing new play equipment for local children and their families to use.
“This is a great example of city and county working together to ensure key services remain in the area and are sustainable in a time of reducing budgets.”
City of Lincoln Council Leader, Ric Metcalfe, said: “In the wake of an appalling arson attack, this was an opportunity to work together to make sure important services remain in the area now and for future generations.
“Using St Giles Community Centre to host activities for children and young people was the obvious solution and I’m delighted the city and county councils have been able to work together for the benefit of local residents and centre users.
“The new play park will also provide a great new facility for young children and families in the area.”