The Stage 2 Our Place funding of over £565,000 has been allocated to the project, planned for by the Douglas Community Spaces Group in partnership with Dundee City Council and members of the local community.
The plans will see the installation of a new playpark, pathways, plantings, fencing, seating and ground works at the site of the previous Douglas Primary School.
Additional funding has also been secured to deliver a programme of activities and events for the local community.
Chair of Douglas Open Spaces Group, Jim Campbell, said: "I would like to thank the National Lottery for providing funding to develop the former site of Douglas Primary School into Douglas Park.
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"This development, in the centre of Douglas will benefit the entire community and will incorporate a play park for the younger members of the community. This project has been a long time in planning and we look forward to seeing the park completed."
Neighbourhood Services Convener, Councillor Anne Rendall, said: "I know a lot of hard work has gone into preparing these plans, applying for the funding and getting to the stage the project is at now.
"This is a great milestone and I'm sure the new space will benefit many in the local community. I look forward to seeing the finished product."
The National Lottery Community Fund's Scotland Chair, Kate Still, said: "This project is the result of local people coming together with a real passion about what happens in their community.
"The importance of having somewhere for the whole community to play, exercise and relax cannot be underestimated. I am delighted that this funding will help to bring their vision to life and National Lottery players can be proud to know that the money they raise is making such a difference."
The development works are expected to start at Douglas Park in the Spring period of 2021.
