The Burnley project is part of M&S's Plan A campaign and the high street retailer is putting £26,500 into the £50,000 scheme.
The green space project is set to go to consultation early in the new year before work begins shortly after.
Groundwork Pennine Lancashire contracts manager Mark Grimshaw said: "This scheme should be an enormous benefit to local people. It is in a key position between the town centre and the residential areas, and will provide a link between the two."
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