The Council will receive $1million in funding from the Australian Government with Benalla being recognised as experiencing hardship due to the drought.
The funding, which is through the Drought Communities Programme, is being distributed across 52 Councils Australia-wide and is to complete local infrastructure and other drought relief projects.
Mayor Cr Danny Claridge said the Council is very grateful to the Australian Government for the funding.
"The Benalla municipality has high exposure to the impacts of drought," Cr Claridge said.
"This funding will be valuable in developing long lasting economic benefit for our community."
The projects funded under this programme are to provide work for people whose employment has been impacted by drought, stimulate local community spending, use local resources, businesses and suppliers and provide a long-lasting benefit to communities and the agricultural industries they depend on.
Cr Claridge said the Council will consider the funding guidelines and relevant local projects that will deliver the most significant and longest lasting benefit.