The operation of Theatr Clwyd in North Wales looks set to transfer from the local council to an independent trust.
Flintshire County Council has this year funded the theatre with £895,000.
However, moving to an independent trust would enable the council to reduce its funding contribution and allow the venue to access funding from elsewhere.
Council chief executive Colin Everett told the Local Democracy Reporting Service: “We’re looking to transfer to what is the industry model for theatres by 2021. It’s not in any way letting it go – we’ll always continue to support it and it’s about creating a better model.”
He added: “I’m pretty sure it’s now the only theatre that’s also a production company that’s in council ownership. Us and the Arts Council will continue to subsidise it, but a lot of it is a financial incentive as it will allow it to access grants and VAT exemptions on ticket sales. It gives it more financial independence and would to some extent reduce the public subsidy.”
Proposals for a referred operating model were approved by members of the council’s cabinet at a meeting last month, with the recommendation coming from the board of governors at the theatre.
A final report on the proposed change of management is to be brought back to the cabinet by the end of the year.
Earlier this year, the theatre was listed in recognition of its architectural interest.