The cash will go to 19 councils to help improve housing and amenities. The aim is to catalyse investment in areas such as North Grangetown and West Adamsdown in Cardiff and Dowlais and Merthyr Vale in Merthyr Tydfil.
Deputy housing minister Jocelyn Davies said: "The programme will improve the quality of life for thousands of people and help restore confidence in towns and villages needing regeneration."
She added that schemes would have the extra benefit of boosting local jobs for builders and suppliers.
