The Merkinch Welfare Hall in Inverness is one of five unused buildings which are receiving the first rounds of financing handed out by the fund's new Heritage Enterprise scheme, which was set up for projects that have failed to attract investment because of the cost of repair.
The listed building, which dates back to 1914, will now be transformed into an amateur boxing club with office space.
Dame Jenny Abramsky, Chair of HLF, said: "In almost every town and city there is at least one historic building standing empty that at one time was at the heart of the local community. Whilst much-loved, these buildings present huge financial challenges.
"This new scheme works to unlock the potential of these old buildings."