Culture secretary James Purnell said the money would be given to Arts Council England over the next three years with the view of boosting the country's national museums and galleries.
He added that the money would help to make England's artists and performers produce "world-class work" and will guarantee free admission to all the national museums and galleries for at least the next three years.
Funding for the Arts Council England will rise from£417m this year to£467m in 2010-11, a real-terms increase year-on-year of 1.1%.
England's national museums and galleries funding will increase from£302m this year to£332m in 2010-11.
Mr Purnell described the spending review settlement as an "excellent deal for arts, museums and galleries in this country".
"Our arts and culture matter. They are a key part of the life and identity of our country, and that's why the government has invested heavily in them since 1997," he added.
"This country can hold its own on the international stage, producing brilliant, world-class and groundbreaking work. This year's settlement will help ensure our arts sector - one of the nation's greatest success stories - can go on to achieve even more."