Stewart Cink pocketed £750,000 for winning last year's Open
Overall prize money at this year's Open at St Andrews will rise by £600,000 to £4.8m, with the eventual winner taking home £850,000.
Golf's ruling body said the value of sterling against the dollar and euro was part of the reason for the change.
"The Open sits at the forefront of world golf and it is appropriate that our prize fund reflects that," said R&A chief executive Peter Dawson.
In 2009, Stewart Cink received £750,000 for winning the event at Turnberry.
The runner-up at St Andrews will enjoy the compensation of a £500,000 and even the player finishing last will earn £2,250.
"Over the last 18 months we have had to take account of the pound's weakened position against the US dollar and the euro and we have increased our prize money accordingly," added Dawson.
It is the first prize money increase for the tournament since 2006.