Councillors backed plans for the project which will see the former college site on Mareham Road re-developed.
The new education facility’s course provision will be linked to the requirements of local employers and adults, allowing adult students and apprentices to access education, including university level courses, creating more accessible learning opportunities in the local area.
ELDC is looking to progress the facility by working alongside Boston College.
The site will be home to wider office facilities to accommodate a number of public sector partners, including ELDC.
That means the authority is almost certain to quite its current headquarters in Manby near Louth.
It is understood that site is likely to be sold for re-development.
ELDC has agreed to allocate £6.23m to the project and is also seeking funding of £1.52m from the Greater Lincolnshire Local Enterprise Partnership towards the total costs of £8.25m.
ELDC will also explore other income streams to support the project development and delivery costs to ensure the project is cost neutral within 15 years.
Councillor Craig Leyland, Leader of ELDC, said: “I’m pleased that council has agreed to proceed with this exciting project.
“The new education facility will provide substantial benefits to the district; helping to equip our residents with valuable skills and ultimately providing a boost to the economy of the area.
“Our plans to bring together several public services will provide opportunities to operate in a more dynamic way and offers the chance to collaborate more closely with our partners for the benefit of the local community.”
A time scale for the development has still to be announced but the decision to back the scheme means ELDC can finalise buying the site from current owners Lincolnshire County Council.
The plans are certain to deliver a significant economic boost to Horncastle.
Town mayor Fiona Martin has described the scheme as ‘wonderful’ although she - and other Horncastle councillors - have raised doubts about extra traffic on Mareham Road and Boston Road.
MP Victoria Atkins has also supported the scheme and said she was particularly excited by the plans for a college which will mean teenagers will not have to travel to Lincoln and Boston when it comes to further education.
It is understood a number of organisations could move into the new hub, including Horncastle Police.
It is not clear yet what will happen to existing business on the site.
The former college closed several years ago and since then it has been used as a business park, although the county council has been looking to off-load it for some time.
One potential deal fell through a couple of years ago, before the News first revealed details that ELDC were interested in moving to the site.