The club, which opened in 1904, runs football teams, music and art sessions and other activities for boys and girls in Salford.
Organisers blame its funding gap on rising maintenance costs, the need to hire more qualified staff, and the loss of grants.
They said they needed £250,000 to cover current losses, invest in new staff and replenish reserves or the facility would face closure.
Up to £130,000 has now been raised for the club as part of an online crowdfunding push, which includes Salford Council’s contribution.
“What better recipient of this support is there than an institution that wholly embodies the true spirt of Salford?” Dennett said.
“There will be people around the world who are only aware of Salford, because of the Lads Club, via the lens of the famous Smiths photograph,” the mayor added.
“So it is only right that the council provides this much need funding now and a commitment to support in the future.”
