The organisation is in discussions with Chorley Borough Council and Lancashire County Council to build the youth centre on a site currently housing an arts organisation, pub and hotel.
A Chorley Borough Council report states that the authority is in the process of acquiring the land occupied by the existing buildings, which it hopes to demolish in October 2015, subject to planning permission.
A state-of-the art facility – featuring a performing arts area, a sports hall and a fitness suite – will be built in their place.
The youth zone will also provide a space for The Arts Partnership, which has donated its land to the project.
According to the report, OnSide will provide £2.05m to support construction costs, while Chorley Borough Council and Lancashire County Council will contribute £1.2m and £900,000 respectively.
The youth zone, which is expected to open in April 2016, will cater for eight- to 19-year-olds, and young people under 25 with disabilities.
Councillor Alistair Bradley, leader of Chorley Borough Council, said the youth centre will provide a range of benefits for young people in the town.
He said: “I’m really excited about what we can achieve with everyone working together and it will provide young people with a healthy environment where they can do things that they currently can’t do because there isn’t a space like this.
“There have been other proposals for a centre in town, but this offers just what the town needs – it’s a once in a generation opportunity and it will give our young people somewhere they can be proud of.”
Youth zones are described as a “unique four-way partnership” between the private sector, local authorities, young people and communities.
OnSide currently manages six youth zones – in Blackburn, Bolton, Carlisle, Manchester, Oldham and Wigan – and plans to open a further 15 by 2020, including one in Wolverhampton in early 2016.
In October, OnSide unveiled plans for a £6m youth zone in Preston.
