Figures have revealed the level of subsidy the Garrick Theatre receives from Lichfield District Council is expected to drop to £310,000 a year.
The projected figure would be less than half of the £663,200 the venue received from the local authority in 2013/14.
The numbers are revealed in a report by Cllr Andrew Smith, Cabinet member for leisure.
He said that the projections for 2016/17 meant that after services provided to the theatre by the council had been paid for, the net cost to the taxpayer would be £256,000 – down from a net bill of £389,295 in the 2015/16 period.
The changes come in the wake of an agreement in 2013 for the Garrick to become a charitable trust.
“On that day, the council’s relationship with the Garrick altered radically,” Cllr Smith said. “The council no longer had responsibility for programming, for budgeting, for employment or for trading.
“These are now matters solely for the Trust and its board of trustees.”
The council is still a funder, service provider and landlord for the Garrick, but the links could be cut further.
Cllr Smith explained: “As the Trust is growing in confidence it is withdrawing from service level agreements, and determining alternative ways of operating.
“In consequence, the council no longer provides services for finance, personnel and payroll and internal audit. The trust has also considering its future requirements regarding IT, insurance and public relations and communications.
“The council has taken the view that it is right for the Trust to seek to make its own arrangements so as to ensure it obtains value for its money and to become even more independent of the council.”