Councils can apply for the funding across five streams including aquatic centres and indoor stadiums, strategic facilities, female friendly facilities, community facilities and planning.
In turn funding can be spent on projects including aquatic centre upgrades, sports grounds and pavilion developments, new sport surfaces, lighting installations, strategic and regional planning, and active recreation facilities such as play spaces and recreation trails.
Minister for Tourism, Sport and Major Events Martin Pakula said the funding was critical in maintaining Victoria's place as one of Australia most active states.
“We want all Victorians, regardless of postcode or gender, to have access to quality facilities so that they can pursue their sporting or recreational passion,” he said.
“Playing sport not only gets people active and healthy it also gets them out into the community – these are important reasons why we are getting on with delivering this program.”
Grants of up to $500,000 are set to be available for female-friendly projects.
Applications for the grant will close on February 14 2020.