Bawtry Town Council has now agreed to a lease of the site to the recreation charity Bawtry Action for Recreation and Sports.
BARS has been putting a funding package together for the planned new building, which will replace the aging prefabricated structure which currently stands on the Memorial Sports Ground.
The charity will run the facility when it is built.
Bawtry Council is expecting construction work to start by the end of the month, with a completion date pencilled in for the end of this year.
Planning permission is already in place.
Bawtry Town Council clerk Angela Harrison said: “We believe construction is likely to start by the end of September.
The council has now agreed a lease for the site subject to the building work being done.
“The existing pavilion is a small building, a pre-fab. The new one is going to be a modern facility with a bar, and a building which will be able to hold functions.
“It is going to be a fantastic addition to the site.”
The new pavilion, with four changing rooms, a multi-purpose room seating 80, and a kitchen, will provide facilities for all of the clubs that use the ground.
It is anticipated that members of the public will be able to use the pavilion too, as it is a recognised community sports facility.
Fundraising has been ongoing for several years.
Matthew Brearley, chairman of BARS, said: “This is a project which will benefit not only the sports clubs of Bawtry but will be available for the whole community to enjoy.”
The charity was set up to provide recreational and sporting facilities for the residents of Bawtry and has already provided children’s play equipment, a shelter for teenagers and a hard surface multi-use games area at Bawtry’s Wharf Street Recreation Ground.