Work to transform the historic venue, which will see it re-open to the public as a theatre for the first time in half a century, can now begin after a lease agreed with Dudley Council was signed off.
Preparations to refurbish the iconic building will now get under way with architects expected to be brought in over the coming days.
It marks an extraordinary achievement for members of the Black Country Hippodrome group, which formed to save the building when it appeared it was about to disappear from Dudley forever.
The group needs to raise around £5 million to make the dream of reopening the Hippodrome as a theatre a reality.
The building, which played host to the likes of Ken Dodd and Bob Monkhouse in its heyday, is in need of a complete overhaul having been closed for seven years when it was last used as a bingo hall. It has not been a theatre since 1960s. It is hoped it will be back hosting events by 2020.
The agreement with the council had been on the verge of completion for weeks but was held up by various legal complications.
Steve Daniels, from Black Country Hippodrome, who led negotiations with council bosses, said he was delighted the deal had been finalised.
He said: "We are thrilled to sign the lease and can now move forward. It has been a long old slog and I have to thank the Friends of the Dudley Hippodrome who kept it in the limelight for four years.
"We have held meetings every Monday and we have had a great rapport with the council.
"We just now need the support of everybody who wanted to keep it open. We managed to do it with the help of many people and we now need people to come out in force."
All hope for the Dudley landmark looked lost when the council revealed plans to knock it down and replace it with an open public space. But the campaign group formed and came up with a viable plan for its future which was deemed acceptable by council bosses.
Mr Daniels said: "We have done this collectively. The people have come together to make this happen. Everyone is happy, we now want to move forward and progress."
The Hippodrome was built in 1938 on the site of the Dudley Opera House, which was destroyed by fire in 1937, and remained open as a variety theatre until 1964. It was subsequently operated as a bingo hall by Gala Bingo, closing in 2009.