Construction is due to start on 17 January 2011 with work expected to take about 20 weeks.
The Khandallah Community Forum and the Cornerstone Community Trust are continuing to raise funds for the remaining balance through community grants and public fundraising.
The hall, in Ganges Road, was built in 1912 and has been an integral part of Khandallah life throughout its history.
The Council's Community Facilities Portfolio Leader, Councillor Justin Lester, says with the building now approaching its 100th birthday, a major upgrade is appropriate to ensure it lasts another 100 years.
"The hall is long overdue for a major revamp," Cr Lester says.
"It's important that the Council values communities and halls and I think this commitment shows it does."
The building's heritage values will be enhanced while adapting it to meet modern needs.
Onslow-Western Councillor, John Morrison, a long-time advocate of the restoration project, says it's been a long, eight-year wait for local residents but now it's time to get on with the job.
"I believe the final design is the best possible outcome for the people of Khandallah," Cr Morrison said.
"Not only will the town hall's original splendour be restored and retained, the new additions will ensure the community gets a building that is modern and functional."
The vision developed by the Forum and the Council is to restored the hall to its original design while the interior will be transformed into a multi-use facility.
This will make better use of space without compromising the main hall," the Council's project manager Geoffrey Snedden says.
The project involves:
- Creating new meeting and activity rooms, including replacing the upper floor gallery seating with a meeting room that provides access to the reinstated balcony.
- Installing ramp access and lifts to make the building fully accessible
- New kitchen and toilet facilities. The existing toilet block will be incorporated into the upgraded facility.
- Relocating the Cornerstone Community Centre to the Town Hall - Cornerstone will meet the cost of routine maintenance and cleaning, while the Council will be responsible for major maintenance.
The Khandallah Playgroup will continue to use the basement throughout the restoration project.