A lease has been signed on three shops in Dorking town centre which will be converted to provide a new library.
Surrey County Council said the new library in St Martin's Walk, which will replace the one at Pippbrook House, would open early next summer.
Mole Valley District Council planners approved the move from the listed building in Reigate Road in September.
Mole Valley has said that it will consider the best use for Pippbrook House when it is vacated.
Alternative uses may include converting the building to flats.
The county council said the new library would provide nearly 50% more floor space in an open plan layout and save at least £50,000 in costs per year.
"The new library will help revitalise the town centre itself," said Councillor Tim Hall.
"Several retailers have been waiting for our decision before committing themselves to moving into St Martin's Walk, knowing that the library will bring people into the centre."
The larger library will have a bigger children's section and more space for children's activities as well as meeting rooms for use by community groups.