The county council has said it wants to ensure the threatened Polegate youth club remains open.
It follows the town council withdrawing funding for the club as part of its latest budget review.
East Sussex County Council (ESSC) is in negotiations with the town council and the owners of the hall that is used.
An ESSC spokesman said: “We’re obviously disappointed the town council has made the decision to cease funding the youth club.
“Our intention is to continue providing a youth club in the town because there is a need locally.”
The club allows young people to meet in a social setting with access to information, advice and guidance and take part in activities.