The lifeline comes after the service between the city centre and Riverside Museum was due to have been axed last Saturday because of rising costs.
SPEN will provide £25,000 under its new green economy fund to keep the 100 service operating for three months while a "permanent solution" is found.
BACKGROUND: Plug pulled on Glasgow’s pioneering electric bus serviceSeparately, the £20 million fund will also pay for two electric single deckers to be trialled by First Glasgow from next summer.
They will operate on the M3 route between the city centre and Milton to the north from next summer.
The £1.5m grant will also cover chargers at one of First's depots.
He said he also expected the current two vehicles, which are only four years old, to continue to operate.
"It would seem incredible to me that it wouldn't be the existing buses."
City council convener for sustainability and carbon reduction Anna Richardson said: “Since the difficulties with the service emerged, we have been working exceptionally hard to find another way forward.
“There will now be no interruption to the service before we go out to tender for a new operator in early part of next year.”
Scottish Greens co-convener and Glasgow MSP Patrick Harvie said: “This is very welcome investment in Glasgow’s green economy, with over £3.5 million for electric buses and low carbon heating, tackling fuel poverty and social isolation as well as well as reducing emissions.
"It has secured a reprieve for the 100 Riversider bus service which had just been axed by the SNP-led council to the dismay of Greens and environmental campaigners.
"It’s vital now the council works to ensure a long-term future for the service as part of a growing zero carbon bus network."
The SPEN fund is also supporting electric car-sharing clubs in Hawick and North Ayshire, electric minibuses for Community Transport Glasgow and a hydro scheme in the Water of Leith in Edinburgh