Development chairman Robert Ferris and fellow committee members expressed delight at the news that the Riverside Stadium will get a further face lift.
The club were awarded aid of up to £800,000 from Sport Northern Ireland for the 2009/10 season and Ferris feels work on a host of areas at Drumahoe could get underway as early as April 2009.
"It's a huge step forward for the club," said the Development Chairman.
"We have been working for over a decade, starting with a green pitch with a rope around it and now people looking down at the Riverside Stadium know it's a beautiful ground.
"What we are going to do now is bring the ground into the new century and getting a lot of our stands upgraded.
"We aren't talking about a big stadium, we are talking about a nice small stadium, which people will be able to look at and say isn't that a wonderful job."
Chairman Billy Gillard was also over the moon after the announcement.
"First of all we are thrilled that we have secured such funding, however there still is a lot of work to be done," he said.
"We'll be talking to a host of people from our supporters to the YMCA, to discuss were our Riverside Stadium needs developing.
"Our plans at the minute is to extend and make our away stand higher, plus start work on our portable cabins just in front of our changing rooms.
"In partnership with Sport Northern Ireland, a design team has been appointed to bring forward plans for the upgrading of our Drumahoe ground and we'll have our first site meeting on Thursday, June 12.
"We are hoping to get a hat-trick of good news on the upgrading of our floodlights, with the Irish Football Association expected to make announcement by the end of this week, in regards to that."
Sport NI will met 85 per cent of the total costs, while 10 per cent will come from the IFA and 'Stute themselves will raise 5 per cent of the money.