The funding of £14.3m will be issued over the next 13 months.
The development body was established last November to help speed up development in the sector and encourage private investment.
It follows the collapse of wave power technology firm Pelamis, which went into administration after it failed to secure development funding.
'Wave Energy Scotland' has said its first contract will be given to a group of 12 former Pelamis employees, which is being led by former Chief Executive Richard Yemm.
In a statement, Energy Minister Fergus Ewing said: "I am very pleased to offer a significant budget of over £14 million to kick start Wave Energy Scotland. This is the biggest technology development programme the wave sector has ever seen.
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"We have adopted a completely new approach to funding the sector. It is one that will foster collaborative research and development and will encourage technology developers to work with large engineering companies, academics and each other to address shared challenges.
"Only last month, Highland and Islands Enterprise, on behalf of Wave Energy Scotland, successfully acquired the intellectual property and a range of physical assets previously owned by Pelamis.
"And yesterday, Wave Energy Scotland agreed to work with 12 former Pelamis employees to capture the impressive learning they have acquired on their technology development journey."
Lindsay Leask, Senior Policy Manager of Offshore Wind and Marine at Scottish Renewables, welcomed the investment. She said: "Today's announcement on the funding to be allocated to Wave Energy Scotland comes as a welcome sign of the Scottish Government's continued commitment to the sector, particularly after a recent challenging period.
"This money will enable WES to continue the development of wave energy in Scotland and build upon the global lead we enjoy by funding work on some of the key challenges commonly encountered by technology developers.
"The industry has recognised for some time that a collaborative approach to solving these problems is vital to ensure wave energy devices can develop to commercial scale, and WES provides a space for that to happen."
(JP/MH)
