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The future of the Silver Screen Cinema in Gaol Lane has been secured by joint agreed funding from the district and town councils.
The single screen premises currently shows films using a motion colour projector which is now outdated.
The switch to digital meant that the cinema would be unable to show new releases.
The town council raised the topic at a meeting in March where Cllr Pam Brivio presented a report about the cinema’s need for an updated system.
It was highlighted that the current operator could not afford an upgrade, which would cost between £35-40,000.
At a town council meeting last Wednesday, Cllr Brivio said: “We are looking at making it more of a community facility.
"Schools will be able to go there during the day, it will open it up for a much better use."
“We hope to develop a Dover Film Festival. The opportunities are endless.
“Schools will be able to go there during the day, it will open it up for a much better use.” - Cllr Pam Brivio
Cllr Brivio also noted the fact that Cineworld were due to open in Dover in the next two years, but believed they could work in tandem.
She continued: “The two facilities can run side by side.
“Compare the costs of other cinemas, it is cheaper, and not everyone has a car.”
It was said that Dover District Council are to fund half of the costs and that there were no extra funding streams at this time.
Cllr Sue Jones added: “It serves a demographic for people who can’t afford Cineworld prices.
“We could end up with Dover Film Festival pulling in people from all over Kent.”
“There are pots of funding we can apply for, the fact that both councils have committed is vital for any grant.
“It could create a few full-time jobs.”
Cllr Gordon Cowan concluded: “It is £20,000, but it is a one off payment to change it to digital.
“Our money could be very well used providing we make sure that we can get the value for money.”