The Old Woollen function space is opening inside the Sunny Bank Mills in Farsley as part of a collaboration between the mill and the owners of The Constitutional club in Town Street.
The three men behind the project are Dick Bonham, Howard Bradley and Choque Hosein, who also run events company Trouble at Mill Events.
All three men come from creative backgrounds - Hosein is a former member of the Black Star Liner band - and have been running community events in the suburb for more than 10 years.
They began working with John Gaunt, owner of Sunny Bank Mills, several years ago to host up pop-up event nights in one of the old mill buildings.
The building has since been demolished but at the time around 200 people would attend the nights to watch live entertainment and enjoy food and drink from local, Farsley-based companies.
The success of the events led to them buying The Constitutional, which they have been running for 18 months, but they were keen to continue working alongside the mill.
Mr Bonham said: "Historically, Farsley town is built around the mill.
"What they've been doing down there in terms of redevelopment has been incredible.
"It has been been responsible for really helping to regenerate the area.
"It's got lots of interesting things going on and I think they are very community minded.
"They want things to be happening in the area and the mill to be a real destination and hub for things that are happening."
He added: "The owners have been brilliant and they've invested a lot of money in the space, getting it up to spec.
"Its a really nice space and the hope is in the longer-term the complex becomes an art hub with rehearsal spaces, artists studios and an education centre that focuses on the old historical looms.
"We've also got some great neighbours like Amity Brewing Co and Grumpy's.
"The whole area is going to become a great little hub and we're excited to become a part of that."
The Old Woollen will host lots of different types of entertainment including live music, comedy, speeches and talks.
It will have a capacity of 600 people.
The bar will work alongside local, independent businesses to provide food and drinks.
Work is progressing and it is expected to open around the Summer months.
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