Keighley Musicians Centre is to move from the railway station to the town’s former Employment Exchange.
The move from its current cramped premises will allow the long-established family business to expand.
As well as music lessons and instrument sales, the two-storey building in Russell Street will house a new arts centre.
Bosses hope to stage concerts in a wide range of musical styles, as well as tea dances, swing jive sessions, comedy nights and theatre shows.
The 200-capacity venue will become the home for the Battle of the Bands, run successfully for several years by the Musicians Centre.
The Russell Street complex, due to open in March, will also offer exhibition space, and meeting rooms for regular users ranging from choirs to knitting groups.
The shop – with triple the floor space of the current showroom – will have a cafe, wood-cladded acoustic room, and a mini-stage for budding performers and instrument demonstrations.
Several tuition rooms on the second floor will allow the centre to widen its teaching repertoire.
The Musicians Centre was set up in 1969 in Cavendish Street and moved to Keighley railway station 20 years ago.
It is now run as two separate businesses – tuition and sales – by the second and third generation of the same family, Jayne Watmough and her children Marie and Michael.
The shop won the Arts Council’s Retailer of the Year award in 2011 and promotes ethical business, including planting almost 1,000 trees.
The teaching arm, the MC Academy, currently has more than 500 students including individual pupils, choirs, toddler musicians and a ukelele club, as well as running rock schools.
The Russell Street venture brings Jayne’s husband into the business, while Marie’s husband Jym Harris – an experienced concert promoter – will run the Exchange Arts Centre as a third business.
The family bought the Russell Street building, which is opposite the New Variety Club, after it was put on the market by McManus and Poole for £270,000.
For many years Keighley’s dole office, the building later became training agency the Russell Street Project, but has been empty since 2007.
Marie said the Musicians Centre had been looking for bigger premises for a while and it began searching in earnest when its current lease came up for renewal.
“We had outgrown it, and parking was always an issue. We needed bigger rooms. Because we’ve done so many successful events, the next stage was starting an arts centre,” she said.
Marie said the Musicians Centre had begun talks with music venue The New Variety Club and art group Small World, both in Russell Street, about working together.
She said: “We want to make this a creative quarter of Keighley. We want the council to support us.”