The £2.25m boost will be used to support a network of development officers around the country who work with clubs, schools and community groups.
It brings to almost £6m the total that has been invested in rugby through the CashBack for Communities programme since 2008.
Over that time, the number of registered rugby players in clubs and schools has more than doubled to about 40,000.
Ayrshire has particularly benefited, with around 3,600 young people playing the game, and Scotland’s Justice Secretary, Kenny MacAskill, was in Kilmarnock yesterday to watch 500 school pupils take part in a rugby tournament.
The CashBack for Communities programme takes the gains of crime, recovered through the Proceeds of Crime Act 2002, and invests them into community programmes, facilities and activities largely for young people at risk of turning to crime and anti-social behaviour as a way of life.
MacAskill said: “The money is taken from those who have harmed our communities where we’ve confiscated assets and taken stuff from them and we’re now putting it back in to make Scotland and our communities better places.
“What we see with the rugby is youngsters improving themselves, they’re having fun, feeling better about themselves, getting healthier and I’ve heard from teachers that it improves their behaviour in school.
“It’s also growing the clubs and developing the community because these youngsters are better citizens and they contribute back, so this is a win-win situation.
“We have boys and girls playing today and pupils are coming from across the area, not just private schools, so it’s doing well.
“We want to see the game grow and expand but we want young people just to achieve their full potential and also to enjoy themselves.”
About £1.25m of CashBack funds has also been invested in rugby facilities across the country through Sportscotland.
Scottish Rugby Union projects manager Neil Carrie said: “What we do primarily is work with clubs and local authorities to fund a network of club development officers.
“We’ve got around 85 of those officers nationally, so every local authority is covered and that guarantees that children right across the country can get access to free rugby activities. It involves primary schools, curricular and extra-curricular activities in secondary schools, as well as school teams, tournaments and festivals.
“There are also some different programmes like street rugby, giving kids something to do on Friday and Saturday nights when they might get up to mischief. We also work with some of the most challenging youngsters who are at risk of falling out of school.
“It’s about unlocking their potential and we find that some have a real aptitude for coaching while others are really talented players, with a couple of them winning youth caps for Scotland.”