Tyne + Wear Building Preservation Trust (T+WBPT) has been awarded £4.6m by The National Lottery Heritage Fund to secure the future of Keelmen's Hospital, regarded as Newcastle's most at-risk heritage asset.

The funding allows the scheme to proceed, restoring the Grade II* listed complex and returning it to use as affordable homes. Newcastle City Council will complete the financing package by matching the grant with section 106 contributions from planning applications and prudential borrowing.

Built in 1701, Keelmen's Hospital originally provided food, shelter and medical care as an almshouse for the city’s sick and elderly keelmen and their families.

The keelmen worked flat-bottomed boats, or keels, moving coal from the shallow River Tyne to larger vessels that could not sail upriver. Their role underpinned the North East’s coal trade and the prosperity it brought.

The hospital was funded through the keelmen’'s own charitable donations. The imposing riverside building has since become a distinctive feature of Newcastle’s historic townscape and iconic riverscape.

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In the late 19th century it was converted into tenement housing for the city’s poorest residents, a use that continued into the mid-20th century until conditions were deemed inadequate. It later served as student accommodation for the former Newcastle Polytechnic (now Northumbria University) before falling vacant in 2009 and deteriorating.

Working with the council, which owns the site, T+WBPT will create 20 much-needed affordable homes while retaining the building’s key heritage features, including its notable 1772 clock and turret.

The project aims to be a model for retrofitting historic buildings, delivering high energy efficiency and renewable energy technologies while respecting the fabric and character of the original structure.

During the construction phase, the hospital will become a ‘living classroom’, offering talks, scaffold tours, demonstrations and training so people can build skills and knowledge in the repair, retrofit and reuse of historic buildings.

An oral history initiative will run alongside the works to record the site’s post‑war story from former residents. In partnership with The Glasshouse (home to the Northern Sinfonia), young people will also explore traditional Geordie songs about the keelmen to mark the restoration through music.

Helen Featherstone, Director, England, North at The National Lottery Heritage Fund, said: "The project to save and restore the Keelmen’s Hospital is a wonderful example of how derelict heritage buildings can be reinvigorated and given a brand-new purpose answering some of the needs of society today. With thanks to National Lottery players, this beautiful building will be transformed into affordable housing for Newcastle and will remain an historic bastion of the city's riverscape."

Shona Alexander, Chair of Tyne + Wear Building Preservation Trust, said: "This wonderful old building will now be fully restored thanks to our strong partnership with Newcastle City Council and great support from both The National Lottery Heritage Fund and Historic England. T+WBPT is committed to rescuing local historic buildings which are such a huge part of the region’s unique heritage."