The council has approved the proposed restructure of the Scarlets' loan.
The plans were presented to Carmarthenshire County Council on Wednesday, September 11.
The new agreement will see the current loan, valued at £2.616 million, converted to a repayment loan.
The loan term will be extended for 15 years from April 1, 2023, with equal instalments of £218,000 to be paid annually.
Payments will start in 2026, after a three-year deferral period.
Interest will continue to be charged throughout the loan period, set at 2.2 per cent above the bank base rate.
Councillor Alun Lenny, cabinet member for resources, said: "We are pleased to be able to extend our support for the Scarlets during this most difficult time for regional rugby in Wales.
"The club’s activity makes a significant economic contribution to Carmarthenshire, so its sustainability is essential.
"Calling in the loan now might endanger the club’s future, which would impact on about 160 full-time and almost 250 part-time jobs."
He further highlighted the broader impact of the club on the economy and community.
He said: "In addition to this, some 87 local companies supply goods and services to the Scarlets, and the benefit to young people in our schools and colleges who come through the academy system is immeasurable.
"The club also delivers skill sessions and other sporting opportunities to over 20,000 pupils in our schools – including events for children with disabilities, and camps in socially deprived areas.
"The Scarlets is a huge part of the sporting, social and economic fabric of Carmarthenshire, the club has a strong regional identity and is home to an iconic international rugby brand."
Councillor Lenny also addressed concerns about the use of public money to support the club.
He said: "Let me be perfectly clear, this loan has not cost the council taxpayers of Carmarthenshire a single penny.
"The interest paid by the Scarlets has been a fair one for this authority, that has covered the council’s cost.
"We are committed to supporting the Scarlets and elite rugby here in Carmarthenshire at no cost to council taxpayers."
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