The 'endowment-style' funding will deliver projects over the 10-year lifespan of the UK Levelling Up The Long-Term Plan for Towns fund.
The fund is designed to help local people decide on local priorities and what is best for the long-term future of the places they live.
Welcoming the funding, Angus Council Leader Cllr Beth Whiteside said: "This Spring Budget announcement provides a welcome investment into our largest urban area.
"We have already committed to the Arbroath Places for Everyone project worth £14m which will support regeneration of the town centre and encourage active travel so we hope that this additional funding will help us to capitalise on that work.
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"We hope that this will also mean that we can focus our existing capital funds on other parts of Angus which also desperately need investment."
CEO of Angus Council Mrs Kathryn Lindsay said: "This funding has come to us due to a shift in the demographics used for profiling Levelling Up investment for which only Arbroath qualifies within Angus.
"We are now keen to explore the detail of the terms of the fund, and how we can support the people of Arbroath, and indeed Angus, to best maximise the opportunities that this unexpected investment will bring."
Also welcoming the levelling up investment in Arbroath, Michael Gove said: "It is fantastic that the UK Government has been able to extend our Long Term Plan for Towns to a further three Scottish towns. This means that we are now investing £200 million in ten Scottish towns over the next decade.
"It is very exciting that we are spending £20 million to help with levelling up in Arbroath. This is all about giving towns the tools to change their future. Many UK towns face similar challenges, and we know that people want to see more investment in regenerating their high streets and town centres. I look forward to working with Angus Council as we develop a plan to help Arbroath, and its elected representatives, tackle the issues that matter most to the people that live there."
