The Creeslough Community Regeneration Project has been allocated €12.1 million under the Rural Regeneration and Development Fund.
The allocation is part of a €164 million funding package that has been announced for 30 landmark regeneration projects across the country by the Minister for Rural and Community Development Heather Humphreys.
A regeneration plan for the village of Creeslough was unveiled in March, with Donegal County Council, Creeslough Community Association and the Creeslough Working Group all making a contribution.
The centerpiece of the Creeslough plan is a new community centre which will include extensive sporting facilities.
The Rural Regeneration and Development Fund allocation is aimed at stimulating rural economies and responding to community needs.