By Gary Duffy
BBC News, Sao Paulo
The Brazilian government is to spend $270m (£133m) in the next three years creating new reservations for indigenous groups in the Amazon.
Indians are among the most deprived citizens in Brazil
Money will also be spent taking water and electricity to isolated groups.
Making the announcement, President Luiz Inacio Lula da Silva said he wanted to redress the debt that the state owed to its Indian communities.
Indians represent less than 0.5% of Brazil's population and live scattered throughout the vast Amazon rainforest.
According to the most recent census, Brazil has an indigenous population of around 730,000 Indians belonging to more than 200 different ethnic groups.
Altogether they speak around 180 languages.
Many live in the hundreds of reservations which already cover more than 12% of the country.
These communities are now to benefit from a significant injection of funds.
More than $270m will be spent over the next three years setting the boundaries of 127 indigenous territories.
Most of Brazil's 730,000 Indians live in the Amazon rainforest
The money will also help to compensate and resettle families of 9,000 rural workers occupying those lands.
Speaking to tribes in the western Amazon town of Sao Gabriel da Cachoeira, Mr Lula da Silva said if private companies were not prepared to carry out the work, it would be done by military engineering units.
The head of Funai, the government agency charged with defending Indian rights, welcomed the investment.
The promotion of indigenous people is very important, said Marcio Meira, because they are a part of Brazilian society that has a very symbolic value.
Among the new proposals is a plan to document 20 indigenous languages threatened with extinction.
Mr Meira said researchers from the indigenous community would be used to help create a dictionary of the language, which he acknowledged was the basis of all Brazilian culture.