The cash will help provide independent advisers to support victims and sexual assault referral centres offering medical help, counselling, forensic examinations and an opportunity to give evidence anonymously on one site.
It is hoped the money will help the government meet its commitment to have a specialist referral centre in each police force area by 2011. The number of centres will increase from 36 to 43.
Home Office minister Vernon Coaker said: “The package of measures we are announcing today will help ensure that the police and prosecutors are further equipped to investigate allegations of rape and secure justice for the victims.
“I urge areas to apply for part of the new funding of up to£1.8m so that we can work towards our target of having a sexual assault referral centre in every area and for victims to have access to the specialist advice of an independent sexual violence adviser."
The government has also promised training for police officers on how to respond when rapes are reported, best practice guidelines for officers and the Crown Prosecution Service and a Rape Performance Group, led by HM Inspectorate of Constabulary (HMIC) to monitor performance on investigations.
The Home Office also revealed there will be an investigation into how best practice guidance has been implemented by HMIC by 2010.
Assistant Commissioner John Yates, Association of Chief Police Officers lead for rape and serious sexual offences, said: "We know from experience and feedback what a dramatic difference they make both in terms of care and support for victims and in relation to giving investigators the best chance to build a successful case.”
Lisa Thompson, Service Development Manager at the Rape and Sexual Violence Project, Birmingham and Solihull, said: "Training from specialist sexual violence voluntary sector services is also essential to combat common myths and stereotypes about rape, and to increase understanding both of the impact of rape, and the barriers to reporting."