Council has agreed to take its time deciding the future of Founders Theatre to give the community a chance to develop plans to take it over.
Founders Theatre in Tristram Street's Boyes Park was closed in March 2016 due to health and safety concerns, and in July 2016 the theatre was also found to be an earthquake risk.
In September, the council consulted with the public over what should be done with the building.
After the consultation, the council has allowed community groups a chance to put forward submissions to take over the building.
The original motion also said that if a group could not be found to take over managing the building before the new regional theatre was approved, then Founders Theatre would be demolished.
An amendment by councillor Angela O'Leary to not put a date on demolishing the building won the majority of councillors' support.
Council general manager Sean Murray warned community groups that the building would take a lot of work to fix.
"The building is not in good shape," Mr Murray said. "The auditorium walls and reception area are all concerns."
Councillor O'Leary said her amendment gives Founders a stay of execution.
"The idea of a creative or community hub is an outcome I was seeking last term when we put this idea out to the public," Ms O'Leary said.
"I love the idea of a children's museum or a community hub, but we need to know who will run it and who will own it and the big question, who will pay for it."
Mayor Andrew King said a decision needed to be made soon as the council does not have the budget to rebuild Founders.
"We're coming to a stage where we haven't got a budget for another $20 million to rebuild this building ourselves so we are looking for others to come in," Mr King said.
Councillor Mark Bunting supported giving more time to the community to save Founders.
"It does keep the keys to bulldozer hidden a little bit longer. It is not expensive for us to keep it alive while those ideas come out."
Councillor Geoff Taylor supported the original motion to demolish the building when the regional theatre gets the final go ahead.
"I do have a concern that by listening to business cases we are creating expectations in the community," Mr Taylor said. "I do have a sinking feeling that if we pursue them it is going to cost the ratepayers money."
Councillor Leo Tooman said that there are already too many community hubs not being used.
"I'm just a bit concerned that these community hubs are becoming a bit like bowling greens around the city where we have a whole lot of them and no one using them," Mr Tooman said.
"What we really need to do is make a decision and lets move on with it."
The amendment vote was won 9-3 with councillors Garry Mallett, Taylor and Tooman against.
The amendment was passed 11-1 with Councillor Mallett against.