The money will go towards better protection from flooding.
The announcement was made by Environment and Climate Change Minister Paul Wheelhouse and will see two major new flood protection schemes get underway.
They will be located in Brechin and Selkirk, respectively.
Following an agreement with COSLA, the Scottish Government will cover 80% of the total cost of the two projects.
More than £38.5m will be set aside for the projects, which have already been granted planning permission, meaning work can start later this year.
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In a separate announcement, the Scottish Government has confirmed it is to provide £500,000 towards the cost of fixing damage caused by severe tides and flooding in Dumfries and Galloway earlier this year. The one-off grant will help pay for repairs to river banks, sea walls and coastal paths.
Commenting on the announcement, Minister Wheelhouse said: "Communities living under threat of flooding know only too well the devastating effects it can have – as recently seen in Dumfries and Galloway.
"That is why flooding remains a priority for the Scottish Government which continues to invest in measures to mitigate the impact of flooding and reduce the risk of it happening in the first place.
"I am delighted to confirm more than £38.5 million Scottish Government funding for new flood protection schemes in Brechin and Selkirk – a significant investment which will allow the councils involved to start the tendering process and bring these schemes to fruition."
(JP)
