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Volunteers have spent the past 10 years putting together the plans to bring the derelict building in Roseburn Park, next to Murrayfield stadium, back into use.
The conversion work is due to start in May and the cafe is expected to be ready by late summer.
Jim McDonaugh, chair of the Friends of Roseburn Park (FoRP), which is behind the project, said: ”At last! This is exactly what our community and park visitors have been waiting for.
"The refurbished building will be so much better than the present eyesore. We are returning the exterior to the way it would have looked when it was first built, 116 years ago – and the interior into a warm and inviting cafe.
"Visitors will have somewhere to go for a hot drink and a snack, maybe even a light meal, when the work is complete.”
The building dates back to 1903 and was designed by the office of the City Architect at the time, Robert Morham, as the park’s pavilion. Later used as a bothy for the park keepers, it was converted for additional use as public toilets in 1936.
The loos were closed in 1982 and the building gradually fell into disrepair. There were calls to demolish it, but that would have cost £12,000 with nothing to show for it.
The FoRP trsutees’s first idea was to turn it into a community meeting place, but they then came up with the cafe plan, which won 89 per cent support in a survey.
Crowd-funding appeals by FoRP and some small grants raised more than £13,000 and last year they secured £66,000 from the council to take the scheme forward.
The conversion has been designed by architect Craig Proudfoot of One Foot Square and All Aspects Building & Construction Scotland Ltd were appointed last month for the building work.
The cafe will be run by Murrayfield Wanderers Rugby Football Club, serving hot drinks, snacks and ice cream and hoping to keep it open as much as possible throughout the year.
FoRP says 1,800 pedestrians and 450 cyclists use the park every day and they believe the cafe will draw even more users to enjoy the park.
Mr McDonaugh said: “It has not been a straightforward project, but working with experienced cafe managers FoRP have come up with a design that gives 30 sq m of floor space as well as a spacious public toilet, kitchen and storage.”
Former chair Pete Gregson said it had been a rollercoaster. “On so many occasions I thought we had taken on the impossible. I can’t believe there will still be something to show to my kids in the park that will be there long after I am gone.”
And Lord Provost Frank Ross, councillor for the area, said: “Converting the old toilet block into a cafe for the whole community to enjoy is a great idea. It will help to support local jobs and volunteering opportunities, while providing a warm and accessible space for local people to meet up.”