Action to improve mental health services on the Fylde coast will include the provision of up to 30 additional beds for patients and the opening of a crisis house in Blackpool.
But more answers are needed on why drugs and alcohol are being allowed to be brought onto wards at the Harbour mental health unit in the town, councillors have warned.
The new beds will be provided at Wesham Park Hospital, which closed in 2011, and will be for the rehabilitation to take pressure off existing services at The Harbour.
It is hoped the Wesham beds will be available by next summer, and the scheme replaces previous plans to re-open the former Parkwood psychiatric unit at Blackpool Victoria Hospital.
The crisis house will offer intensive seven-day treatment for people in need of emergency care, while more resources are also being poured into community mental health teams.
The measures were outlined to members of Blackpool Council's adult social care and health scrutiny committee who had asked for an update on the mental health improvement plan but in place by the Lancashire Care NHS Foundation Trust.
Last year the service was branded "in chaos" with the trust given a "requires improvement" rating following an inspection by the Care Quality Commission (CQC).
Many patients were waiting too long in A&E to be seen by mental health doctors, but the number waiting longer than 12 hours has reduced to 24 in August compared to 52 in March.
Caroline Donovan, who took over as chief executive of Lancashire Care in April, told councillors measures were now starting to have an impact.
She said she had been "outraged, disturbed and upset" by some of the things she had seen since taking over.
She said the improvement plan - which also includes liaising with universities on the training of more mental health nurses - was taking shape but it would be 18 months before things were turned around.
Funding has been put in with the Trust seeking £15.5m in additional finance for mental health services.
But families of mental health patients in Blackpool said there were still issues, including with alcohol and illegal substances being brought into wards at The Harbour.
Representatives of the Stuart Clayton Family Support Group who attended the meeting, said this needed to be stopped, and said no time could be lost in making improvements.
One representative told the meeting: "I have lost two friends to suicide in Blackpool this year.
"We can't wait 18 months, I can't lose my children and I don't want to lose another friend to suicide."
Committee chairman Coun Jim Hobson said he felt mental health services "were starting to move in the right direction" and asked for a further update next April including answers on what was being done to stop drugs and alcohol being taken onto wards.