Northern Ireland will receive a further £97m from the European Union Peace II initiative.
EU commissioner Danuta Hubner announced the funding
Professor Danuta Hubner, the EU commissioner for regional policy, announced a two-year extension for the programme in Belfast on Friday.
The extra funding comes as a result of sustained campaigning from various groups in Europe and Northern Ireland.
The Peace II programme aims to achieve economic renewal and social integration in areas most scarred by the Troubles.
It aims to promote reconciliation and to help build a more peaceful and stable society.
FIVE AIMS OF PEACE II
Inclusion and reconciliation
Local re-generation and strategic development
Mrs Hubner said the money would allow the programme's vital work to be "consolidated".
"The European Union understands that economic and social development in support of peace and reconciliation at grassroots level is not a short term process," she said.
"The programme provides real added-value in bringing communities together to address shared economic and social problems and opportunities.
"In face of the current difficulties in the peace process, this decision demonstrates the continued solidarity and support of the European Union towards permanent peace in the region."
Peace II director Sean Henry said on Friday that the programme has had "a real impact on both Catholic and Protestant areas".
Mr Henry said they wanted to encourage more groups to apply, particularly those from Protestant areas, and that the application process had been "greatly simplified".
"We have set aside some money for community groups who have not previously applied for funding and for those who perhaps don't have the skills to fill in application forms," he said.
"With this type of effort, we should be able to ensure that this programme really gets to the people who need the money."
Sinn Fein MEP Bairbre de Brun backed the extension, but called for a new Peace III programme to be set up that would run until 2013.
"Future funding should be directed to the twin goals of reconciliation and social inclusion, in order to combat the legacy of the conflict, particularly for those most marginalised in recent decades," she said.
Jim Allister, the Democratic Unionist MEP, urged members of the rural community to apply for funding.
"Farmers to date have had a very poor experience applying for Peace II money and in particular measures which have been administered by the Department of Agriculture and Rural Development," he said.
Ulster Unionist MEP Jim Nicholson warned he would be scrutinising how the money was allocated.
"While the distribution of funds may have been imperfect, I will be placing pressure on both the government and the commission to ensure the equal distribution of funding in the future," he said.
Beginning in 2001, the initiative followed on from the five-year Peace I, which distributed 500m euros. Peace I was established in the wake of peace developments in 1994.
Peace II covers Northern Ireland as well as the border counties in the Irish Republic.
Groups applying for Peace II grants must demonstrate their proposals will address the legacy of the Troubles and show how they will promote reconciliation and mutual understanding.
More than 5,300 projects have been funded by the programme.