The Rural England Prosperity Fund has been extended for a new round, with £33m to be allocated towards supporting countryside infrastructure and rural firms.
The REPF recognises that rural economies face unique challenges, from limited infrastructure to dispersed populations, and aims to level the playing field with urban areas.
The £33m amount is down from previous allocations, but it is in line with wider overall cuts to the Shared Prosperity Fund, from which the REPF is distributed.
The Country Land and Business Association (CLA) said it had lobbied for the REPF to continue as it was "one of the few measures directly available to rural communities".
"Overall, it is positive that this funding will continue for the next year at least for rural areas," the group, which represents farmers and landowners, said.
"The grants are delivered through local authorities, and the matrix of how it will be distributed is yet to be revealed.
"The CLA will continue to work with local authorities, to ensure that funds are accessible and available to those who require them."
Within the announcement, Defra indicated that £5 million will go towards “continuation of important services for rural communities”.
These includes the Rural Community Assets Fund, which will provide capital funding for the refurbishment and development of community-owned assets, such as village halls or community centres.
The Rural Housing Enablers (RHE) scheme is also included, which will help bring forward sites to provide affordable housing in the countryside.
