The refurbishment works, which will begin in October and take six months to complete, include replacing the roof, upgraded toilets, partially rebuilding the stage, replacing damaged seating and flooring, and repairing the exterior of the building and gutters.
As a condition of the grant, council will commit an additional $351,000 to meet the total refurbishment cost.
Council will work closely with stakeholders to schedule the works in a way that allows planned shows and events to continue.
"This investment will create between 50 and 70 jobs over the next six months which is a much-needed injection of work directly into the Ōtaki community, with opportunities for local workforce development," Ōtaki ward councillor James Cootes said.
"This is a real boost for Ōtaki, especially as the evolving impacts of Covid-19 are starting to be felt in the community.
"I'm delighted that Government has seen the value in investing in these two projects and in supporting the growth and vibrancy of Ōtaki.
"This wouldn't have been possible without the fantastic work from the staff at council to first get accepted into the Provincial Growth Fund and then put forward quality applications to receive funding like this."