While many have given the grant a cautious welcome, there are still concerns over several unresolved issues.
Paul Trebilcock, from the Cornish Fish Producers Organisation, says the questions he raised over the business case and running costs remain unanswered.
"It's not about the new building but about ongoing costs to users," he said. "None of my questions have been answered, but if DeFRA says it's fit for approval, well it's their call.
"They should have got the new commissioners in first, let them consider how best to take Newlyn forward and have a strategy in place and then submit their plans with a proper business case."
Newlyn harbour master Andrew Munson added: "The new Board of Commissioners will, no doubt, have to confirm with all interested parties that everyone is now in agreement with the proposals, since there are considerable amounts of money involved not only from the commissioners but from the fishing industry as well."
But the council's fisheries officer Tony Woodhams said he hoped the decision might signal a turning point in the port.
"This is marvellous news," he said. "All they have got to do is find their own match funding from the private sector or secure a loan against their properties and put the project together."
And Nick Howell of the proposed Newlyn Fishing Community Interest Company, which has been put forward to run the new market, added: "Newlyn can now move into a new phase. It gives the new commissioners a new challenge and the chance to move things forward."
Newlyn fish merchant Robin Turner agreed.
He hopes the new market will act as a catalyst to bring vessels back from Plymouth to their home port in Newlyn.
"I hope it brings transparency into the industry and signals a new start for everyone in Newlyn," he said.
Former chairman of Penwith District Council, Malcolm Pilcher, added: "If we get those boats back from Plymouth, and I am sure French and Spanish vessels will start landing in Newlyn if we have got the right facilities, it will bring more money and jobs to the port."
In April last year, the owner of the South West's largest fishing fleet, W Stevenson and Sons, said it would not be entering into business with the new fish market operator because it felt the plans were not financially viable.
They were unavailable for comment this week on the latest offer of funding.
In total, 11 grant applications were approved by the English EFF panel, chaired by the Marine and Fisheries Agency which met on February 17. Total grant aid, match funding and other investment in the 11 projects represents an estimated £12.6 million investment for the English fishing industry.
article copyright THE CORNISHMAN