Member for Lowan Hugh Delahunty announced on Monday that Nhill Memorial Community Centre would receive a $75,000 Putting Locals First Program grant.

Hindmarsh Shire Council will contribute the remaining $60,000.

The money will buy new digital equipment for the cinema, which was forced to close its doors when 35mm film reels became defunct in December.

Council chief executive Tony Doyle said that once the cinema was digitally equipped, new-release films would be shown in full-definition and surround sound.

It would also be able to screen a variety of media, including 3D films, remastered classics, amateur films and recordings of Hindmarsh events.

"The possibilities are endless," Mr Doyle said.

"It will be a fantastic resource for the community, businesses and schools."

He expected the upgrade would speed up Hindmarsh audiences' access to the latest blockbusters.

Distribution of costly film reels to regional areas meant it could take months for some films to reach Nhill.

Once works are complete, he expected new releases would be available within a few weeks.

Mr Doyle said installation of the new equipment would start late next month. The cinema will re-open in July.

"Council views the cinema as a critical asset for the shire," Mr Doyle said.

"The cinema provides entertainment, social connectivity and cultural value but it's also an important piece of our economy.

"When people go out of town to go to the movies, they'll often eat out, fill up their car and do some shopping while they're there.

"By having a cinema operating locally, we're keeping more dollars in Nhill."

He said the cinema would also help attract and retain people in Hindmarsh Shire.