Quebec's renowned Mont-Megantic observatory will get the $500,000 it was seeking, Jake Enright, a spokesman for Industry Minister James Moore, said late Wednesday.
The facility, one of Canada's most important astronomical research centres, risked closing its doors at the end of March due to a lack of funding, director Rene Doyon said.
News of the imminent closure had created a stir in public and scientific circles on Wednesday.
The New Democratic Party and the Bloc Quebecois also denounced the possible closure.
Founded in 1978, the mountaintop observatory boasts a 1.6 metre, 24-tonne telescope, and is one of the most important facilities of its kind on the East Coast.
It also offers guided tours and an activity centre that attract 20,000 visitors a year to the picturesque region, best known for a rail disaster in nearby Lac-Megantic in July 2013 that claimed 47 lives.
It is largely funded and administered by the Universite de Montreal and Universite de Laval.
The organization has been in financial difficulty due in part to a decline in public subsidies, despite receiving a $4.6 million grant in 2009 from the Canada Foundation for Innovation to upgrade and purchase cutting-edge astronomical equipment.