Owner Boyd Tunnock has agreed to give £250,000 to the appeal for an independent station.
He told the BBC Scotland news website he hoped the inshore vessel would be called the Thomas Tunnock lifeboat.
Campaigners said the funding would allow the resumption of operations in St Abbs next year.
The RNLI closed its station in the village earlier this year, ending a 104-year association with the Borders community despite a high profile campaign against the move.
An appeal was then launched to raise £500,000 to fund an independent station.
The Tunnock's donation will allow operations to return to the Berwickshire site but a further £250,000 is required to provide long-term financial support.
Lifeboat appeal chairman Alistair Crowe said: "This is a highly significant development and the emergence of Tunnock's as a major donor has unanimous support from the community of St Abbs.
"On behalf of the St Abbs community I would like to express my sincere gratitude not only to Tunnock's, but also to all our other donations both big and small.
"We look forward to becoming an operational lifeboat station at St Abbs again as soon as arrangements can be put in place, which will include a new purpose built boat."
Mr Tunnock said he wanted to support the appeal and had agreed to provide £250,000.
"That's a lot of caramel wafers," he added.
"I am a sailor and in actual fact I know about the vagaries of the sea, that's why I sent them £10,000," he explained.
That led to further talks with the appeal and an agreement to make an increased donation to a boat, provided it was named the Thomas Tunnock lifeboat - the name of both Mr Tunnock's grandfather and late brother.
A major donation from teacake and caramel wafer maker Tunnock's will bring a lifeboat back into operation at St Abbs after the RNLI closed its site.