The Cabinet Office has confirmed that Devon's Youth Service will be part of their Delivering Differently for Young People programme.
It means that the County Council's service will receive £20,000 from the Government over coming months to help in establishing an independent social enterprise to run Devon’s youth service in future.
The Council agreed last year to set up the independent enterprise because it was the only way of protecting the youth service from further budget reductions.
It now plans to establish the mutual organisation, which will employ the service's current youth workers who will continue running the service for young people and their communities.
The not-for-profit social enterprise will have access to funding currently unaccessible to council services and departments, and therefore be less reliant on council budgets.
The Council will retain responsibility for ensuring its statutory responsibilities for young people are carried out, commissioning the new organisation to deliver them on the council's behalf, subject to tendering.
Councillor Barry Parsons, the Council's Cabinet Member with responsibility for the service said: "This is excellent news from the Cabinet Office.
"This will give a much welcomed boost for young people, as well as to youth workers involved with the service.
"It's also a great bonus for the County Council to be able to show the high value placed on this service, despite the budget cuts we're suffering.
"We want the service to have firmer footing that is less affected by the constraints of Council funding.
"We're confident that this is the best way to protect the service's future for young people, while ensuring that the staff, who are already known within their communities, continue to provide the service."