Shropshire Council's cabinet has agreed plans to close Pontesbury Library at its currently site in Bogey Lane and re-open it in the new Hall Bank development.
The authority has found the library a more permanent home after the number of users increased.
Councillor Lezley Picton, cabinet member for culture and leisure, said: "The library is currently in a demountable building. This move will see its transferred to a brand new community hub which will become a focal point for the community.
"The move has the full backing of the council and the Friends of Pontesbury Library. It is an excellent opportunity to secure future for the library."
The Hall Bank development, which will be operated by Shropshire Homes, was approved in September 2018.
It will also have provision for partner agencies and a range of other services and functions.
The existing library building and land was transferred to the converted Mary Webb Academy Trust from January 1.
At the cabinet meeting at Shirehall on Wednesday, members also agreed to establish a new conservation area in Tilley, near Wem.
The council made the move to protect the village which has several timber-framed buildings up to 600 years old.
However during the consultation period, there was seven letters of objection.
Objectors said they were concerned about being affected by planning restrictions, as well as concerns about more modern developments in the area being housed under the conservation area banner.
Councillor Chris Mellings for Wem said: "Seventy five per cent of people in Tilley are in favour. There was some objections but following meetings with resident and officers, changes have been made to the boundary on the north side.
"The suggestion to take it out seems like a very sensible way forward."
Mark Barrow, the authority's director of place, said the council will keep the conservation under review and work with the parish going forward.