The building in Tylorstown, Rhondda Fach, is the only community venue left in the town after its library closed.
The Grade II-listed building dates from 1933 and was built using funding from miners' families.
The Heritage Lottery Funding will help provide services including employment support and training, a new cafe and community classes.
There are hopes the hall's former cinema could be revived, which would make it the Rhondda Fach's only cinema.
The hall has already been awarded £161,900 to develop plans and will receive £546,000 from the Heritage Lottery.
The last remaining miners' welfare hall in one of Rhondda's two valleys is to get a £500,000 makeover.