The grant will fund repairs to Stainton Aqueduct, which was badly damaged during storms Desmond and Eva in December 2015. Contractors will start work next week and the repair project is likely to take around nine months.
The grant will also help to develop other key sites along the Lancaster Canal, such as Hincaster Tunnel and Sedgewick Aqueduct, and promote new leisure, educational and volunteering opportunities along the waterway, as part of the Partnership's Lancaster Canal Towpath Trail project.
The total cost of the restoration, interpretation and community projects is £2.2m. This new grant, made possible thanks to National Lottery players, is supplemented by secured funding of £500,000 from the Rural Development Programme for England's Cumbria Countryside Access Fund, £140,000 from South Lakeland District Council and smaller grants from Cumbria County Council and Kendal Town Council, which supports the Towpath Trail project. The Canal & River Trust will provide the remainder of the match funding, c£200,000
In August last year, HLF gave an initial development grant of £41,000 to scope out the project so the repairs and wider heritage regeneration activity could begin as soon as the funding green light was given.
A new project officer will now be appointed for two years to lead the community, tourism and interpretation aspects of the initiative. Students from Kendal College and members of the local community will be invited to join in a range of activities from recording local history memories to learning traditional dry stone walling techniques. The plan is to produce two new trails, as well as wind-up audio canal character sculptures and sound and light shows deep inside Hincaster Tunnel.
Stephen Higham, from the Trust, said: "The Lancaster Canal celebrates its bicentenary in 2019 so this is a perfect time to work with the Lancaster Canal Regeneration Partnership to help realise our joint aspirations for wider heritage and regeneration activity.
"Securing the future of the 200-year-old aqueduct is vitally important for the future prosperity of the Lancaster Canal and we are delighted the HLF grant means we can now get on with the essential restoration and repair work."
Audrey Smith, Lancaster Canal Regeneration Partnership chair, added: "The canal has great untapped potential as a regional visitor and tourism destination. We look forward to continuing to work with the Canal & River Trust as we breathe new life into this waterway through the Lancaster Canal Towpath Trail project."