The grant will go towards renovating Beeston's Hillside Primary School for use as a business centre with internet and office facilities for hire by corporate organisations and members of the local community.
The social enterprise, the Camberwell Project, was formed by a group that claims to be frustrated by the pace of public sector activity. It plans to provide business support and advice to residents wanting to start their own enterprises.
Leeds City Council's grant, which comes from the Government's Local Enterprise Growth Initiative, will be boosted by loan finance and an investment of £30,000 from Leeds Federated Housing Association.
"This area is fairly safe, but it suffers from negative perceptions," said Todd Hannula, a director of the Camberwell Project.
"The main driver is to provide an inspiring environment so that people can be aspirational. The problem at the moment is that people can't relate to business, and they need to know that they can drive their own regeneration rather than wait for the next government programme to come along."
The network centre is due to open in February 2008 and should be self-sustaining within 18 months. An identical project is under way in the Harehills area of Leeds.