The Shire of Northam successfully bid for the Federal funding in the first round of the National Stronger Regions Fund last week.
The windfall will pay for 50 per cent of the project.
The Shire is seeking funding elsewhere to reduce the final cost to ratepayers.
Community services executive manager Ross Rayson said the idea for an interpretive centre came through a planning process as part of the Supertowns program.
The centre would provide recognition and opportunities for Aboriginal communities, regional tourism and the environment.
Mr Rayson said he hoped the facility � initially planned for July, 2016 � would be up and running by the end of next year.
�The council is committed to the project; concept designs are drawn up and there will be further consultations to meet the needs and expectations of the community,� he said.
Kerry Collard, the Aboriginal project delivery officer for natural resource management in Northam, welcomed news of the funding, while emphasising the need to represent the interests of the wider Aboriginal communities in the region.
�I think the opportunity to promote Aboriginal people, culture and heritage is something that needs to happen more, particularly in the Wheatbelt,� Ms Collard said.
Earlier discussions about the aims of the centre included meetings with the Maarli Circle of Elders and regional environmental groups.
Shire President Steve Pollard said the Council hoped the centre would become a cornerstone attraction for the region.
�I believe the Shire of Northam is one of only five projects from Western Australia to receive funding.
�The interpretive centre will be located adjacent to the existing visitor centre and provide a wonderful opportunity for regional tourism, in addition to providing a place where we can celebrate the importance of our natural environment and the Aboriginal culture to the area,� Cr Pollard said.
�Engagement with the local Aboriginal community is a focus of the Council and this project provides a wonderful opportunity and focal point to strengthen the relationship.� Northam has among the highest number of heritage-listed buildings in rural WA.
�All the ingredients are there for Northam to thrive and grow and the Council is committed to working with the community to unlock that potential.�