Residents from Godolphin Cross say Sheikh Mohammed Bin Rashid Al Maktoum has made a generous offer to contribute to the cost of turning the building into a community centre.
Godolphin Cross Community Association chairman Richard McKie: "These kinds of things don't normally happen. It's a fairy tale really. It's not often a sheikh steps in to help a Cornish village."
People from the village approach the UAE prime minister, highlighting the connection between their village and the Godolphin stables which the emir runs.
The stables were named in honour of the Godolphin Arabian, a bred of horse first bred in 1724 and named after Francis Godolphin, 2nd Earl of Godolphin.
The Methodist chapel in the village, which is twelve miles west of Falmouth and comprises of around 150 homes, shut in April of last year.
McKie went on to say: "We can't thank Sheikh Mohammed enough and we'd love to see him in this neck of the woods any time. He would be assured of a very warm welcome."