Gorgeous, situated in the city centre, was handed the cash boost as part of the £1.57 billion Culture Recovery Fund.
Owner Shaun Keasey – who called for urgent support for nightclubs – said the move would ensure the venue could reopen in the city.
The popular venue, in School Street, had been closed since lockdown started in March – with a drop in income of more than £250,000.
Mr Keasey, who has been critical of the Government, said the cash boost demonstrated nightclubs were seen as an "important part" of UK culture.
He said: "They are the birthplace of electronic and dance music, have launched the careers of internationally-renowned DJs and performers, and are hubs for socialising and interaction within communities.
"Gorgeous has been part of Wolverhampton’s nightlife for over 10 years and, I believe, broke down the barriers between ‘gay’ and ‘straight’ clubbing in our city. It is an important cultural venue.
"The award protects many jobs directly and indirectly supported by Gorgeous and will ensure that, as and when conditions allow, the doors will reopen.
"We can’t wait to see the dance floor packed with happy clubbers once more."
Gorgeous is one of the city's few remaining nightclubs and the city's only LGBTQ plus venue.
It has been voted The Midlands Best Gay Nightclub for five years and is an active member of Wolverhampton LGBT plus Alliance.
The nightclub is a founding partner of Wolverhampton Pride and is a major sponsor of Gorgeous FM – a not for profit inclusive radio station, which broadcasts in Birmingham, the Black Country and Shropshire.
Culture Secretary Oliver Dowden said: "This is more vital funding to protect cultural gems across the country, save jobs and prepare the arts to bounce back.
"Through Arts Council England we are delivering the biggest ever investment in the arts in record time.
"Hundreds of millions of pounds are already making their way to thousands of organisations.
"These awards build on our commitment to be here for culture in every part of the country."
Sir Nicholas Serota, chairman of Arts Council England, said culture was an "essential part of life" and added the funding would help hundreds of businesses survive.
No date has been given by the Government over when nightclubs can reopen, with a minister saying it was "hard to see" them reopening until they had a "long-term" way of dealing with the virus.