Leicester Hebrew Congregation has received almost £82,000 initial support from the Heritage Lottery Fund for its £1.2 million Sharing Jewish Heritage project.
The aim is to preserve and celebrate the Jewish history of a city where the Orthodox synagogue building has been used for worship and educational purposes since 1897.
Its school rooms will be transformed into a visitors' centre, reflecting the high demand for tours, particularly from schools. It attracts more than 2,500 visitors annually.
Renovated spaces will support activities including research sessions and heritage days. New displays will showcase the community's history and artifacts.
The development funding will help the shul to progress plans to apply for the full grant at a later date.
Leicester Hebrew Congregation chair Gary Kramer expressed his pleasure that the Lottery fund backed the synagogue's vision.
"The education of others and personal learning are valued highly within Judaism," he pointed out. "The development of an educational suite will provide more than just a taster of our faith."
Project administrator Sandra Cohen said: "The synagogue is an historic and very beautiful building which impresses everybody who visits.
"This project is particularly important because it will help promote a greater understanding of Judaism in the multi-cultural city of Leicester," she added.
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