The Royal Society for the Protection of Birds (RSPB) in the north of Scotland has worked in partnership with crofters to secure the funding from the Scottish Rural Development Programme (SRDP).
It will help maintain and extend traditional crofting methods while protecting species such as corncrake, corn bunting, twite and the great yellow bumblebee.
RSPB regional director George Campbell said: "Crofting and conservation go hand in hand. The decline of active crofting represents a threat to biodiversity in general and to key bird species in particular."
Bridget England, the RSPB agricultural advisory officer, said: "To date we have worked on about 40 applications and these should generate about 800,000 for crofters and farmers over the next five years."
She said the groups have a common goal in developing land management techniques.
The Keoldale Sheepstock Club in Sutherland has secured SRDP funding for grassland management to help rare species without impacting upon the current sheep and cattle enterprises.
In North Uist crofters and RSPB officers have worked together to manage land on the Balranald reserve, renowned as the best place in the UK to see the corncrake. Measures there include support for grazing by cattle which helps control unproductive vegetation.
Local RSPB warden Jamie Boyle said: "As well as corncrakes, we are particularly concerned to protect other characteristic birds of arable farmland such as corn bunting and twite. But perhaps even better than this is the spectacular display of wild flowers that characterises the machair environment at Balranald."
Other grants have been awarded to the Skye Crofting and Corncrake Partnership and crofters in Lower Barvas in Lewis.