Pewsham Locks once lifted narrowboats on their journey from Melksham to Chippenham.
The Wilts & Berks Canal Trust has already restored the towpath, waiting wharf and spillweir, together with a mile of waterway.
Now the charity hopes to restore the adjacent dry dock as well, thanks to a £15,000 grant from Wiltshire Community Foundation.
The aim is to create a sheltered outdoor classroom where schoolchildren and other visitors can discover how the canal was built and learn some of the traditional construction techniques.
Pewsham Locks was a busy site during the 19th century, with a lock-keepers cottage, carpenters' workshop, saw pit, forge, brickworks and limekilns.
The dry dock - in the pound which stored water between the middle and bottom locks - was used for boat repairs and the cleaning and painting of their hulls.
Boats were pulled in and then the water was drained through an underground channel so that the vessel rested on a brick floor.
Excavations revealed pieces of pitch which had dropped off hulls during repairs, together with nails and other items, as well as slate tiles indicating the dock had a tiled roof.
The foundations are still visible today and have been stabilised by volunteers, who are now rebuilding the low walls.
Dave Maloney, chairman of the Melksham, Chippenham & Calne branch of the Trust, said: “We are sincerely grateful to Wiltshire Community Foundation for their very generous grant, which will help us to breathe new life into an important part of our industrial heritage.
“The extra funding means we can complete the rebuilding of the dry dock by adding a roof of authentic Welsh slate supported by wooden posts.
“Together with the wider restoration of the Pewsham Locks site, visitors will soon have a much clearer understanding of how it once looked and will hopefully be inspired to learn more about the fascinating history of this wonderful waterway.”
Fiona Oliver, Wiltshire Community Foundation joint chief executive, said: “We are delighted to be able to support the Wilts & Berks Canal Trust with this important restoration work through a grant from our specific fund for heritage and conservation projects.
“Once complete, the new dry dock will provide a brilliant new educational resource for visitors to learn more about the rich history of the area. We look forward to hearing how it progresses.”
The aim of the Wilts & Berks Canal Trust is to restore the waterway from the Kennet & Avon Canal near Melksham to the Thames & Severn Canal near Cricklade and the River Thames near Abingdon, connecting Chippenham, Calne, Royal Wootton Bassett and Swindon.