Pitlochry High School is in line for a £8.7 million investment to create a new community campus.
The upgrade will involve a new four-court games hall, a fitness gym and a community library, as well as classroom improvements.
However, the existing Atholl Leisure Centre and Pitlochry Library will close as part of the project.
They, and a number of other council properties will be redeveloped to create affordable housing in the town.
The plans were approved by Perth and Kinross councillors on Wednesday.
Perth and Kinross provost Xander McDade – a former Pitlochry High School pupil – said the agreement was “a real win” for the council and the community.
Mr McDade told colleagues Pitlochry had experienced under-investment in its facilities in recent decades, compared to other towns.
And he added: “This really good news for Pitlochry, really good news for the school and for the community.”
Pitlochry community will share high school facilities
Wednesday’s decision follows a long-running review of the authority’s assets in the Highland Perthshire town.
The council received more than 800 comments from residents, and broad support for a community campus.
It comes after families campaigned to save Pitlochry High School from the axe five years ago.
The Atholl Leisure Centre also faced closure last year.
It was given a stay of execution so the assets review could be carried out.
It, Pitlochry library, the council area office and Tyree House (home of Pitlochry tourist information centre) will now close to make way for affordable housing.
Community asset transfers will be developed for Pitlochry Town Hall and the council’s Cloichard depot.
And a leasing arrangement for Pitlochry Pavilion will be pursued with the Highland Perthshire Community Partnership on behalf of the Pavilion User Group (PUGS).
Meanwhile Pitlochry public toilets will be kept open.
The refurbishment of the High School will result in new science labs, technical workshop and home economics suite.
The new four-court sports hall and larger fitness gym will be available to pupils and the community, with a 140% increase in opening hours compared to the Atholl Leisure Centre.
Pitlochry housing shortage causing major issues
Mr McDade said it was important to note that the loss of underused and costly public buildings will free up space to build much-needed affordable housing in the town.
The area has one of the longest housing waiting lists, with 227 families and individuals in need of a home.
It also has the highest proportion of second homes in Perth and Kinross.
This is causing major difficulties when it comes to the recruitment and retention of teachers, health and social care staff and other key workers.
Employers are also having to bus in staff from miles around because there are no homes locally.
Mr McDade said: “This assets review will allow us to house around a fifth of the families and individuals who are on the housing waiting list.
“That is a real win for the council and for the community.”
Councillors on the finance and resources committee were told community engagement will continue as the plans develop.
But the plans have not been universally well-received.
One critic told The Courier: “The Pitlochry community should not have to accept a decision that means we can only have additional housing at the the expense of our long-standing facilities.”
Conversation