Newport City Council's cabinet has agreed a new leisure and well-being centre should be created in the city centre.
A new purpose-built centre, with modern facilities, would be located on a key riverfront site and would replace the ageing Newport Centre.
Cabinet also approved the disposal of the Newport Centre site to Coleg Gwent to further its ambition to have a campus in the heart of the city centre in new buildings providing a first class learning environment.
A public consultation on the proposals received more than 1,000 responses with the overwhelming majority supporting the proposed new developments.
Councillor Jane Mudd, Leader of Newport City Council, said: "I am delighted that so many people not only took part in the consultation but share our view that these are exciting and welcome proposals.
"Together, they will have far-reaching benefits for residents, further education and the local economy, particularly the city centre. Existing and new customers will be drawn to the new state-of-the-art leisure facilities while hundreds of students and staff will bring the campus to life.
"The developments will be an investment in healthy bodies and healthy minds. We have made a commitment to ensure the new centre meets high environmental and sustainable standards and I'm sure Coleg Gwent will be doing the same for the campus.
"As the project progresses, there will be further opportunities for consultation and public engagement, particularly at the planning application stage. We will continue to work closely, with Newport Live, Coleg Gwent and Welsh Government on this transformational vision."
Steve Ward, Chief Executive of Newport Live, said: "Newport City Council's vision and commitment to create a new state-of-the-art leisure and well-being centre which will positively impact on the lives of hundreds of thousands of people in future years is outstanding and welcomed by Newport Live.
"The new facility will be hugely positive in the coming years as part of the redevelopment, economic recovery and educational offer provided in the city centre.
"We are proud to be the sport, leisure and cultural partner of the council and we will work hand-in-hand to build on the community consultation to create an amazing new facility and exciting programmes which will positively impact on the wellbeing of local residents.
"There has never been a more important time for investment into health and wellbeing and the council is facilitating the opportunity to lead happier and healthier lives. We welcome the investment being made by all parties and we cannot wait to get started on the exciting project and new attraction for the city"
Guy Lacey, Principal/Chief Executive of Coleg Gwent, added: "It's fantastic that the public have shown such great support for these proposals. This brings us a big step closer to delivering an important plan for the future growth and development of the city centre. We look forward to playing our part in providing an amazing new learning resource for the benefit of the people and businesses of Newport."
The agreement to proceed with the new leisure and well-being centre is subject to obtaining all necessary consents.
Funding the £19.7 million cost will be met through a combination of council finance, a saving in the subsidy paid to Newport Live and Welsh Government grant (subject to approval).
The current site of Newport Centre will be disposed of by way of a 250-year development lease, at market value, subject to agreed terms and conditions.
Cabinet have authorised officers to take the next steps in relation to the lease,