Frome Town Council has pledged its continuing financial support of the Cheese and Grain for the next five years.
The internal affairs committee has agreed to paying a service level agreement (SLA) of £35,000 a year, subsequently increased by inflation, up until April 2017.
In return, the Cheese and Grain provides a large venue that can be booked by Frome-based community and voluntary organisations, charities, schools and the town council.
However, councillor Damon Hooton said he wanted to see the council's financial involvement with the Cheese and Grain diminish in future years. He suggested a ten-year tapering agreement with the tenth year being zero.
Other councillors argued that if the council withdrew its SLA, the benefit of being able to provide people and charities with a large venue would also diminish.
Chairman of the internal affairs committee, Toby Eliot, pointed out that to continue offering subsidised space to community groups and organisations the council would have to look for another venue if the council no longer had an agreement with the Cheese and Grain.
In a report to the committee, the SLA was described as "an investment in the economic life of Frome" and the building as "Frome's town hall in the original sense of the word".
The Cheese and Grain was also described as an investment in the civic social life of the town proving the only large, flexible central venue in the town.
In 1997 the council signed a 99-year lease when it took over the building from Mendip District Council.
At last week's meeting councillor Nick White reminded the committee that even if the decision was taken to abandon the Cheese and Grain now, the debt repayment of about £46,000 a year would still have to paid back by the town council whether it was open or shut.
The venue is about to enter an exciting new phase. On Monday, it plans to submit a £1 million grant application to the Lottery Communities Living Sustainability Programme and last week it won a £25,000 grant from the Community Builders to bring the empty mezzanine into use. This grant in turn allows the Cheese and Grain to take out a £250,000 loan to be repaid by letting out space in the refurbished mezzanine.
It has also become involved in youth employment and skills training and at the beginning of May two outreach workers began looking at employment possibilities for young people in Frome.
In the report to the internal affairs committee, it said: "Although there is no guarantee that all of the plans for the hall will come into fruition, it is recognised that within the last year the trustees and management have made significant inroads into addressing some longstanding concerns and have begun to see the hall more as a public asset on which other services can be hung and investment in the town made."