The Environment Agency has pledged £300,000 to the next phase of the project to revitalise the River Ver in St Albans.
St Albans district council, alongside the Environment Agency (EA) and other partners, is working to return the river to a more natural state, make enhancements to Verulamium Park and improve the quality of its artificial lakes.
The money will help fund the drawing up of detailed designs by specialists, as well as the business case for proceeding with the initiative.
Sam Lumb, EA area director for Herts and North London, revealed the plans in a letter to St Albans district council following an enquiry on the project's progress from Cllr Anthony Rowlands, portfolio holder for community, leisure and sport.
Ms Lumb described the project as "[the EA's} largest partnership project of its kind and a priority chalk stream restoration scheme", and assured the council that the EA intends to help fund the implementation of the scheme in future years.
She said: "We look forward to building on our close partnership with St Albans district council, and through this project, bringing benefits to the people and wildlife of St Albans."
The multi-million project will see a 2.5km stretch of the rare chalk stream rejuvenated as it flows through Verulamium Park and the Sopwell Nunnery.
The project also aims to improve water quality at Verulamium lakes, which were built more than 80 years ago to an antiquated design.
Other major improvements have been envisaged for the surrounding wildlife and landscape, including the creation of accessible wetlands.
When the project was launched in spring 2018, councillors were warned it would take several years to complete and funding would have to be obtained.
Cllr Rowlands said: "I can understand that many residents are eager for us to advance the project and want to see some tangible results such as immediate improvements to the lakes. However, I must ask them to be patient as this is a complex project and much other preparatory work needs to be done before the diggers can move in.
"The state of Verulamium Park has been a major concern for many years now and we are determined finally to resolve it."
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