Hopton and Coton Parish Council will receive the compensation after agreeing to withdraw a petition to the House of Lords.
Campaigners in the parish north east of Stafford had called on HS2 to create a 5.6km-long bore tunnel to prevent the high-speed line, which will go through the heart of Hopton, splitting the village in half.
However the proposals were rejected on cost grounds, leading councillors to call for £706,000 in compensation to build a new village hall.
Now an agreement between the two parties has been reached, with £350,000 set to be spent on the project.
Vice-chairman of the council, Councillor June Brown-Bullivant, said: “We have officially agreed to withdraw the petition to the House of Lords because we have received an offer of £350,000 which will go towards the building of a new village hall.
“The condition was from HS2 that we withdraw the petition, which is due at the House of Lords on October 29.
“It was calling for a number of things – including for £706,000 which we would have liked toward building a new hall.
“That was one of the many things we wanted and after negotiations with HS2, they came up with this offer.
“Hopefully this week we will have the official documents in order and possession of the cheque – fingers crossed.”
The village hall has only around five years of use left, with the council "having no funds" to pay for the repairs.
Councillor Brown-Bullivant added: "We're pleased to get this money and so we were quite happy to withdraw this petition.
"It's quite a happy result for us."
Other conditions from transport bosses include the start of HS2’s phase two and that Hopton and Coton Parish Council receives all required approvals for the work.
A spokesman for HS2 said: “We continue to work constructively with the parish council, and expect to reach agreement with them on measures we can put in place to mitigate the impacts of the scheme on the parish and its community.”