The cash will be shared by 30 libraries and will be spent on the development of information technology services and educational work.
The schemes benefiting from the grants, which range from pounds 51,000 to pounds 274,000, were among 96 which bid for money from the Challenge Fund, created in July this year to improve library facilities.
Announcing the awards at the launch of National Libraries Week, Mr Smith said: "Libraries are accessible and egalitarian gateways to knowledge. Libraries are the key to ensuring we do not turn into a nation of information `haves' and `have nots'."Reuse content