York Museums Trust's (YMT) proposals for a £2.4m transformation project at York Castle Museum have been awarded initial support by the Heritage Lottery Fund (HLF).
The trust has lodged an application for a £1.3m grant towards its plans, which will lead to an overhaul of the upper levels of the Debtors' Prison area of the attraction.
Development funding worth £73,000 has also been awarded to YMT in order to help develop its bid for a full grant, with a decision expected to be made by the HLF in January 2013.
The plans comprise a new five-year exhibition to mark the centenary of the First World War, which will "change and refresh" for each centenary between 2014 and 2018.
If the bid for a full grant is successful, work will commence immediately and will result in the closure of the upper two floors of the Debtors' side of the prison being shut for 12 months.
Fiona Spiers, head of the HLF for Yorkshire and the Humber, said: "This project aims to not only make more accessible a fascinating building - the oldest debtors prison in the country - but also bring alive the stories of the First World War to new audiences."
YMT chief executive Janet Barnes added: "The proposed changes will be unveiled in time to mark the 100th anniversary of the start of the Great War."
Image: Jitka Erbenová