A three-year fundraising appeal to secure the future of the Watermill Theatre in Berkshire has reached its target of £3m.

The campaign to save the Grade-II listed theatre in Bagnor, near Newbury, was launched in June 2005 and attracted more than 4,000 contributions from individuals, trusts, foundations and businesses, including £200,000 from Arts Council England. By January 2007, campaigners had already raised the £1.8m needed to acquire the theatre premises, while the remaining £1.2m has been earmarked for a restoration project which has already got underway.

As part of the scheme, the theatre's lily pond area will be rebuilt to create extra space for visitors, as well as an area for workshops and meetings. Additional toilets and an additional car park will also be created, while actors' facilities will be refurbished. Chair of the Save the Watermill Appeal, Ralph Bernard, said: "Having raised £3m in just three short years, we have accomplished so much. The theatre is in a terrific position – we can now look forward to an exciting future ahead."

The theatre's artistic director, Hedda Beeby, added: "Now The Watermill can continue to build on its heritage, creating a place that will continue to support emerging talent, lead the way in delivering artistic excellence and welcome our very supportive audience." A number of prominent actors also backed the campaign to save the theatre, which picked up two accolades at the 2006 Tony Awards for its production of Sweeney Todd.