The Connections Bus Project is set to expand following successful bids to two local partnerships and South Cambridgeshire District Council.
Part of the £300,000 funding will go towards buying and converting the bus to include internet access, games consoles, information and advice, music and a refreshment shop.
The project, which was set up in 1993 after three young people died in a car accident, visits venues during term-time and employs 11 part-time staff.
Ken Hay, head of community development at Cambridge City Council, said: "Young people have told us they want more things to do in Cambridge city centre and for it to be a safer place to visit."
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