Some lateral thinking at council will result in a new amphitheatre at Echo Point, where traditional owners can share knowledge with visitors.
Blue Mountains council had received a federal government grant for a range of projects in the Echo Point precinct.
Completed are renewed facilities at Katoomba tourist park, an upgraded Silver Mist car park and a new walking track at Reids Plateau.
But plans for a new visitors information centre were stymied when no tenders came in under budget.
Instead of returning the remaining money, council - with agreement of the funding body - will now build a gathering place/amphitheatre. It will accommodate 70 people and allow engagement with traditional owners.
And other plans - to reinstate the Prince Henry clifftop walk, which has been closed for more than a decade because of land slippage - have also been rethought. Council will now build a raised metal walkway which will give a fully accessible, night-lit path to the Prince of Wales lookout.
Greens Cr Kerry Brown said it was a great result.
"This will expand visitors' experience. It is an inspired solution [to the funding shortfall]," she said.
Cr Don McGregor agreed.
"It's an elegant solution to a troubled redevelopment of our premier tourist attraction," he said.
"The original plan to extend the visitor information centre would have detracted from the site. The beautifully designed improvements to the lower walkway will enhance the visitor experience."
Cr Mc Gregor said he was "particularly taken with the small amphitheatre where people could take in the magnificent view and perhaps reflect on the thousands of years the Gundungurra traditional owners have cared for their country".
The new plans also call for a conservation management plan for the historic Katoomba Falls Kiosk. Council's DA for a 90-seat restaurant on site was knocked back, partly because of its impact on the heritage building.
Council will now do minor works, including removing asbestos and painting.
Cr McGregor said: "The community will be relieved that the restoration of the lovely little kiosk is going ahead and the planned extensions are not."
Cr Brown said council had prepared two expensive and unsuccessful DAs for the building.
"They have been opposed by its own heritage advisory committee, the National Trust and local residents. So I am glad that we are now taking heed of the advice of heritage experts and preparing a conservation management plan to guide future maintenance, uses and any development of the property."