Daylight can be seen through the roof of the old Victorian Chapel off Watery Lane prompting a move to make urgent repairs.
Newent town councillors visited the Grade II-listed building on Monday to assess the damage and decide what should be done.
Town clerk Deirdre Rosser said there was £1,000 in the council's budget for a roof survey, but the full cost and scale of repairs is still to be decided.
She said: "I think at this stage we are looking at stopping the building falling into further disrepair. Daylight can be seen through the roof."
As part of a restoration project, on-site toilets, which are not currently in a fit state to be used by the public, could be brought up to scratch. But this still leaves a question mark over the long-term use of the chapel and former mortuary buildings.
At present, the chapel is used by the town council as a workshop area, and the mortuary is used as a storage space.
Mrs Rosser said a public consultation exercise several years ago had drawn a blank.
Mrs Rosser said: "We sent out questionnaires. Obviously, we have to consider the position of the building, in the middle of the cemetery, and respect that."
An architect did draw up plans to link the chapel with the former mortuary complex and turn the buildings into a theatre for Newent, but nothing came of this.
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