The area next to the Heugh Battery Museum, built in the late 1800s and known locally as The Bandstand, is being turned into a new outdoor events space to host a wide range of events and performances.
The new-look site is to be named Elephant Rock after the former landmark which stood a short distance offshore and used to be visible from the spot.
Councillor Shane Moore, leader of Hartlepool Borough Council and a Headland and Harbour ward councillor, said: “The name Elephant Rock has real historical significance for the Headland, and I am delighted that it has been chosen for the new events space.
"Even though many years have passed since the rock’s destruction, it is still fondly remembered as a historic local landmark and there is a strong sense of pride in it.
“I am confident that the new events space will prove to be a great asset for the Headland and the wider town – staging a variety of open air performances whilst also being a focal point for community events.”
The elephant-shaped limestone rock was formed by a combination of coastal erosion and quarrying.
Most of it collapsed into the sea in a storm in 1891. It was recently immortalised in a mural on the side of the Pot House pub.
Pot House landlady Elaine Gooding added: “Elephant Rock will be a great asset.
"Most pubs on the Headland have some sort of music during the week or on a weekend and it always goes down really, so I think this is going to be a great venue and I love the name.”
The restoration of the bandstand area is being led by Hartlepool Borough Council with Seymour Civil Engineering the principal contractor.
It is due for completion in November.
New terraced seating has been installed and other works include the creation of a feature paved area and landscaping parts of the site.
Gemma Ptak, the council’s assistant director (preventative and community based services), added: “We are lucky to have it in such a stunning location right on the coastline and it is going to be a great asset for years to come.”