People power has saved iconic Northbridge pub Picabar.

The state government will on Tuesday confirm a 10-year lease has been granted to the current owners after months of renegotiation and expressions of interest from other parties, which also involved building owners the Perth Theatre Trust.

The decision will be popular with the Perth community after much backlash against the WA government when it asked for EOIs for the lease, which used to be owned by the Perth Institute of Contemporary Arts.

The small bar is within the Perth Cultural Centre in Northbridge, a strategic activation space for the government, with a new museum and art gallery rooftop in development.