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The Playhouse, which opened in 1946, has been managed by Parkwood Theatres since 2011.
The venue has more than 95,000 visits a year and continues to attract big name acts and shows to the area, such as Jimmy Carr, Jason Manford, Joel Dommett and Sarah Millican.
The 664-seat venue also enjoys a successful pantomime season each year with more than 25,000 tickets sold in the 2024 shows.
More than 700 Friends of The Playhouse volunteers also play a key role fundraising for the theatre.
The current contract was due to finish in March 2027 but councillors agreed to continue the current management arrangements under a new contract until March 2037 at a full council meeting on Tuesday 8 July.
Councillors also agreed to extend the contract with Parkwood Leisure for the running of Hutton Moor, Scotch Horn and Backwell leisure centres until 2037.
The financial arrangements of the new contract are not typical of the theatre sector, with The Playhouse operating with no subsidy from us.
The Playhouse building also requires significant investment to address concerns raised in building condition surveys and the new contract transfers maintenance responsibility to Parkwood Leisure.
Under the existing arrangement, the responsibility for the upkeep of the theatre lies with us.
Due to the current financial position, these works are not considered a priority and without an alternative option available, the Playhouse would likely have faced closure.