Blackpool Council has chosen Leeds-based company Facultatieve Technologies Limited to supply new cremators for the town's Carleton Crematorium.
Three new cremators will be provided to replace the former equipment which was subject to breaking down, causing delays in holding services for bereaved families.
Read more Blackpool crematorium extension approved
A council report says the contract will include servicing and maintenance for five years, with an option to extend this for up to a further 12 years.
Investment will also see a single storey extension added to the existing crematorium building to house the new cremators.
Two temporary cremators are operating while the work is carried out, which is expected to take around nine months.
The changes are part of a five-year development plan for the site, which will also include the addition of more than 2,000 new burial plots.
Investment is being funded through the council's capital programme.
Improvements have already seen the opening of a new cafe run by Nibbles, which already operates cafes at Anchorsholme Library and the Blackpool Centre for Independent Living.