Milton firm Calder Stewart will build the new facility on the site of the town’s current library-service centre, between Union and Ajax Sts.
It will replace the town’s separate 59-year-old pool and 81-year-old library, combining both in a "modern, fit-for-purpose community library and pool".
Outgoing Clutha district Mayor Bryan Cadogan, who has pressed for the "transformative" new facility since it was first mooted in 2018, said he was delighted.
"I’m beyond thrilled. We have strived to hold true to the 64% of Bruce residents that supported this project under extremely trying pressure.
"This project is a cornerstone for Milton’s future, one that will define the wider district and add even more vibrancy to Milton’s revitalised main street."
Mr Cadogan said the new complex would be named in honour of the recently deceased Elsie Stewart, wife of Calder Stewart founder Bruce Stewart.
"I want to sincerely thank the Bruce Communities Facilities Trust and the fundraising committee for their ongoing passion and commitment to the cause and it is fitting that Elsie Stewart’s lifelong contribution to her Bruce community is recognised," he said.
Original estimates were $14m, and they had since grown to $19.4m, of which the building cost is $17.75m.
Mr Cadogan said the council would work closely with Calder Stewart to ensure delivery on budget.
"The approved budget of $19.4m covers all aspects of the overall project, including construction and car parking, and includes $6.4m of grants and other funding, leaving $13m to be funded by rates. Council decided that this $13m will be interest-only for a period of two years to reduce the rates impact."
The Bruce Communities Facilities Trust would raise $2m for the project.
Fundraising committee chairman Stephen Woodhead said it was fantastic to now have the certainty the project would proceed.
"For the trust, it means we can move to the next stage of fundraising. We are looking forward to continuing to work with community and funding agencies as we move towards [our] target, the community’s contribution to this amazing facility."
Demolition and groundwork for the new project is expected to start in January next year.
