The council has approved funding of £200,000 as part of the £2million development.
The Stage 2 £200,000 cash injection from the council's Property Investment Fund was awarded to Irish firm Melcorpo Property Arc Cinema Ltd by members of the council's Infrastructure Services Committee (ISC) on Thursday, October 3.
The fund is a tool which enables the council to assist the delivery of its Regeneration Strategy to encourage improvements and bring prominent vacant buildings back into use.
A £10,000 Stage 1 grant was awarded to Melcorpo earlier this year to conduct a feasibility study into the potential cinema development at the former Gala Bingo premises on Peterhead's Marischal Street.
Councillors were advised that the feasibility was completed by cinema development professionals and demonstrated the long-term viability of a cinema at this site.
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The study concluded that a five-screen cinema could be supported by the wider marketplace of Peterhead on a sustainable basis.
It also highlighted a capital funding gap above the £100,000 limit set for the Property Investment Fund.
Aberdeenshire Council's Head of Economic Development, Belinda Miller, described it as a "significant opportunity" for Peterhead.
She told councillors that due to the transformational impact the development was likely to have on the town centre – particularly in terms of its evening and weekend economy - it was decided to recommend a larger grant award to enable the project to proceed.
Due diligence checks have been carried out on parent company Melcorpo Commercial Properties Unlimited which have proved satisfactory.
Chair of the Infrastructure Services Committee, Councillor Peter Argyle said afterwards: "This project has the potential to act as a catalyst for further investment in Peterhead town centre and lever in significant private sector investment.
"This development will also help to deliver a number of outcomes within the Peterhead Regeneration Action Plan as well as creating an additional 15 jobs within the town centre."
Norman Smith, chair of the Buchan Area Committee, added: "We are hugely-supportive of these plans for a multi-screen cinema in the heart of Peterhead and I look forward to seeing progress on the project in the months to come."
Speaking as chair of the Peterhead Development Partnership, Councillor Stephen Smith, said: "This is a very significant and welcome project which could be transformational for the town centre and help generate further economic activity."
Brian Gilligan of Melcorpo said: "We are delighted to be working with Aberdeenshire Council to help rejuvenate the leisure offer in Peterhead town centre and we are very appreciative of the great support we have received without which this fantastic project would not be possible."
(MH/JG)
