The Ministry of Housing, Communities & Local Government award covers the 2020/21 financial year.
It will help support the work of the Rough Sleeping Operational Group, which includes council partners P3, Wolverhampton Homes, St George’s Hub, the Refugee and Migrant Centre (RMC), and Good Shepherd Ministry.
The extra funding will supplement current services and will be used to provide additional outreach provision, accommodation, support and activities to help keep people off the streets.
Councillor Peter Bilson, Deputy Leader and Cabinet Member for City Assets and Housing, said: “We are delighted the MHCLG has recognised the positive work we are doing in the city to tackle the issue of rough sleeping and the extra funding will help support this.
“The council continues to actively work with its partner agencies to find longer-term solutions for preventing rough sleeping in the city.
"We particularly focus our efforts on preventing someone from becoming homeless in the first place and work closely with our partner agencies such as P3, Housing Outreach teams and colleagues providing money advice, in order to find solutions for people threatened with homelessness and ensuring support is available for those who are unable to maintain their tenancy for whatever reason.
"We have also developed a ‘Rent with Confidence’ framework and approach which gives people information about the standard of and management of the private accommodation they move into, and also helps the council to identify suitable properties which helps to end or prevent individuals' homelessness in the future.
“This funding will enable us to broaden this work and make even more of a real difference to reducing the number of rough sleepers in the city.”