The scheme will cost £200,000 in total, the remaining three-quarters of which it is hoped will be funded equally by cash from the RFU, Sport England and money raised by the club itself.
Plans include an overhaul of the changing rooms and showers, and improving disabled facilities.
The plans are designed to make the club more inclusive and to allow girls to continue playing when they are older.
Chelsea Howard, 11, told councillors: “I have been playing at Minehead Barbarians since I was six but next season I will not be able to play with the boys any more. I am currently having to change in a toilet and can’t get changed and washed properly.”
Club secretary Colin Howells, coach Dionne Jones and treasurer Mike Willes also spoke at the meeting, highlighting how much the club contributes to the region and asking for the money to revamp facilities to cater for the number of people who use it.
Cllr Kate Kravis, lead member for finance, said: “For so many people to take the effort to turn up tonight shows the dedication at the club. I certainly feel that this would be a great project for the rugby club, for Minehead and for West Somerset as a whole."
Leader Cllr Tim Taylor added: “It is a fantastic project and it is a great privilege to support this vibrant club which does a great deal for the local area. I hope we get more such applications for 106 money.”
The money, paid by housing developer Summerfield Developments, comes from a pot of cash aimed at benefiting the community.
After the decision, club chairman Grahame Symes said: “It’s absolutely fantastic news and it’s down to all the hard work of those who did the presentations at the meeting.
“For Chelsea, an 11-year-old, to stand up in front of all those people and speak as well as she did was incredible.
“Getting this money will really help us get closer to reach our goal.
“We are fundraising like mad and are getting close to our target but we won’t just stop when we reach it – there is always more that can be done to improve the club.
“The fundraising is down to all the volunteers – everyone at the club has done something to help out – and the public who have supported us.”
Tickets are available for the upcoming fundraising events – the Holly Ball on Saturday, December 22, and the Christmas prize draw the following day.
Visit www.pitchero.com/clubs/mineheadbarbarians for details.