The new 1,000 seat facility to be developed in St Andrew's Square is being proposed to be included in the multi-million pound Edinburgh and South East Scotland City Region Deal.
Charitable trust IMPACT Scotland and the Scottish Chamber Orchestra (SCO) are behind the plans for the development, which would become the new home of the SCO. It would also be a venue for musical performances, conferences, public educational engagement and be used each August by the Edinburgh International Festival.
Speaking in a Scottish Parliament debate to highlight the importance of the Edinburgh Festivals in the 70th anniversary since they were founded, Culture Secretary Fiona Hyslop said the Government has been a "strong supporter and fully engaged" in the development of the performance centre proposals since 2013, when Ms Hyslop met with donors and Royal Bank of Scotland.
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"We saw great value in the proposal and funded the initial feasibility study," she said.
"Since then, we have been in discussion with partners involved in the Edinburgh and South East Scotland City Region Deal to secure their support for the venue, and I'm pleased that these negotiations have progressed.
"This project will secure a critical new performance venue in the centre of Edinburgh; provide a home for the Scottish Chamber Orchestra; and will be used exclusively for Festival performances in August. The economic and cultural benefits of such a venue will be felt widely across Edinburgh and its surrounding regions and across Scotland.
"In the face of increasing national and international competition, this support will optimise Edinburgh's position as an international festival city and Scotland's reputation as a leading centre for music and the performing arts."
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