More than £300,000 has been invested in the Pavilion Cinema, safeguarding 20 jobs.
The cash boost means the Galashiels complex will become a fully digital cinema – described as the biggest change to film presentation since the 1920s.
Cinema manager Andrew Poole said: “This represents the largest investment we’ve ever made in the Pavilion’s facilities.
“It allows us to continue showing the same wide choice of films our customers enjoy from Hollywood blockbusters to less mainstream specialised films.”
The Pavilion has spent £100,000 towards installing four new 2K digital projectors, as well as receiving support from the UK’s Digital Funding Partnership.
Each projector costs £66,000 with ancillary items and installation costs bringing the total to over £300,000. The move to digital pictures and sound comes after industry analysts warned that traditional 35mm print films will not be available by 2013.
Mr Poole added: “Within the £100,000 investment from the Pavilion is a second £15,000 digital 3D system, giving us two screens which can show 3D films.
“It is often the case that two 3D films are released on the same day, and with only one 3D screen we are having to either not show one of the films, or both films are sharing the same screen, reducing the number of performances and restricting the opportunities our customers have to see the film of their choice.
“With two 3D screens, we will be able to maximise customer choice and cope better when 3D films are released simultaneously.”
Mr Poole said the improvements will also allow major arts events such as live screenings from New York’s Metropolitan Opera to be shown, as well as London’s National Theatre and classical ballet.
“This is a very exciting time for us and the Pavilion has embraced digital and the benefits it can bring our customers,” said Mr Poole. “As an independent cinema, it is vital that we maintain facilities that offer strong competition to the Edinburgh cinemas.
“By installing digital projectors now, I believe we are a step ahead of our major competitors as, due to their size, they inevitably take longer to change to digital.”
Installation of the digital projectors was due to start on Monday and Mr Poole said disruption to performances would be kept to a minimum.