Council Leader Chris Robbins said the authority was exploring how best to restore and protect the building so that it is removed from the at risk register managed by Historic England.
Cllr Robins said: "As well as saving Pimp Hall dovecote for future generations, we want to open it up to the community and enable residents and visitors to learn more about its history and the Pimp Hall site through a series of events and educational resources.
"We hope one day to see the dovecote being used for special events, exhibitions or open days, but first we need to fully understand the scale of work required in order to preserve it for all to enjoy.
"To that end, we’re currently carrying out a study to see what the restoration project could look like, and will work with the Friends of Pimp Hall Park and Nature Reserve, Pimp Hall Allotment Association, Hornbeam, Friday Hill Tenant Management Organisation and other local organisations to develop future proposals."
Claire Ford, chair of Friends of Pimp Hall Park and Nature Reserve, said: "We are all very excited that the dovecote is going to be restored. Funding from the council will mean that this beautiful, listed building can once again be a wonderful reminder of our joint history and heritage in Chingford.
The Friends Of group will provide updates on how the project progresses on its website and social media sites.