Severn was one of 10 yachts built by the renowned Crossfields of Arnside for the Royal Mersey Yacht Club in the 1910s.
Severn and Crossfields featured in a recent BBC Villages by the Sea programme about Arnside.
The National Lottery Heritage Fund grant includes funding for volunteers, children and young people to learn wooden boat building skills and how to sail traditional boats such as Severn.
Work includes replacing her internal framework which holds the boat together.
A feature of the project is funding to build a Gaffling 4.1 dinghy which is designed to teach children and adults how to sail a traditional sailing boat before moving onto bigger boats such as Severn.
Gaffling 4.1 dinghies were designed by Andrew Wolstenholme, a leading boat designer who grew up in the Morecambe Bay area, and are available in kit form from Fyne Boats at Gatebeck near Kendal.
Crossfields of Arnside were leading builders of Morecambe Bay Prawners and yachts from the 1840s to the 1940, including Arthur Ransome’s Swallow.
Arnside has a long maritime heritage. The estuary was the port to Kendal and the Victorians held regattas.
Alasdair Simpson, chair of the Friends group charity set up by Arnside Sailing Club to help maintain and sail Severn, said: “We are delighted to have been awarded the funding thanks to the support of National Lottery players.
"The grant means that we should have Severn back on the water within the next two years.”
*Severn is owned by Arnside Sailing Club. The club has doubled its membership since 2020 and was short listed for Sailing Club of the Year in 2019 and 2022. The club have a Try Out Day on Sunday (May 29).
*Since The National Lottery began in 1994, National Lottery players have raised over £43 billion for projects and more than 635,000 grants have been awarded across the UK. Follow @HeritageFundUK on Twitter, Facebook and Instagram and use #NationalLotteryHeritageFund.