The development will be jointly funded by charity OnSide Youth Zones and Croydon Council, which last year agreed to invest £3.25m towards building costs, £300,000 in revenue expenses, and has provided the site.
OnSide Youth Zones will secure £3m of revenue funding from the private sector, charitable trusts and grants to run the centre for its first three years.
It will include an indoor climbing wall, performing arts studio, film and multi-media facilities and a mentoring kitchen for local eight- to 19-year-olds (and up to 25 for those with a disability).
The centre will cater for up to 400 young people every day, who will pay 50p to access activities.
Croydon youth zone is one of three youth zones in the capital, with further projects in Barking and Dagenham and Barnet in the pipeline.
OnSide deputy chief executive Rob Carter said the zone would "provide high-quality sports, arts and general recreational facilities for thousands of local young people in a safe and secure environment".
"The centre is based on the growing OnSide Youth Zone network of facilities across the country which are used by more than 14,000 young people every week," he said.
OnSide currently has eight youth zones operating in England, including in Manchester, Bolton and Carlisle.
A further 12 zones are currently under construction or at planning proposal stage.
If Croydon Council approves the plans, OnSide hopes to commence construction this year with a view to opening in 2018.
