The money is to be used to establish a memorial fund for victims suffering financial hardship, as well as providing funds for groups concerned with the bereaved and disabled.
The move, which is said to be a first step towards setting up permanent structures for dealing with the needs of victims, reflects the recent emphasis on looking after those most affected by the troubles. A number of support groups in this area have recently become more organised and active.
Some see the new emphasis on the issue as, in part, providing a counterpoint on the controversial issue of prisoner release, which continues to be the subject of heated debate in Northern Ireland.
On one reading the victims issue has been unjustly neglected for many years; on another, its new status, it is seen as going some way to redress the balance, as releases of paramilitary prisoners are about to start in the near future.
In October last year a former senior civil servant, Sir Kenneth Bloomfield, was asked by the Government to look at possible ways of recognising the pain and suffering felt by victims of violence. He delivered a report in May containing a series of detailed recommendations.
These included a review of compensation arrangements, the provision of advice on victim support, improved pain relief services and increased sensitivity from employers towards victims. He also called on paramilitary organisations to reveal the sites of the graves of missing victims.
The Good Friday agreement included a section on victims, pledging support to involved organisations.
Yesterday Adam Ingram, the Northern Ireland Office minister with responsibility for victims, announced a new hardship fund. The Government is to seek contributions locally and overseas, and will provide matching funding of up to pounds 1 million.
The Government is also setting up an educational bursary scheme to provide assistance to children and young adults who have lost a parent or suffered in some other way.
There is also to be an independent review, carried out by Sir Kenneth Bloomfield, of criminal injuries compensation schemes.
Mr Ingram said: "This is a comprehensive package, which targets major areas of disadvantage for victims and their families. We have much more to do and announcements will be made in the autumn.
"I am committed to ensuring that victims get the recognition they deserve. We must hope that there are no more victims, but realistically that is not going to be the case," he added.
Families Against Intimidation and Terror also welcomed the initiative. Glyn Roberts, its spokesman, said: "This is a first vital step in addressing the problems of victims and their families."Reuse content