The grant brings the Wardown Park Museum £200,000 away from its £3.5m target to fully restore and conserve the facility.
The project is being led in partnership by Luton Culture and the council.
The scheme will see new areas of the historic building opened up along with the ground floor being improved and furnished.
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A new cafe is to also be developed with access to the park, while the Morning Room is to become a new art gallery as well as a venue for events.
The next stage of the project will finalise the plans for the museum and will require it to close for redevelopment works, which are expected to begin around April 2016 and be complete by autumn.
Karen Perkins, Director of Arts and Museums, Luton Culture, said: "It is fantastic to receive the grant and have the backing of Heritage Lottery Fund for the proposed redevelopment plans for Wardown Park Museum.
"We are £200k off our target of £3.5M and would welcome support to enable the full restoration of the listed building and conservation of Luton's historical collections."
(LM/CD)
