The waterfront attraction, which will now get £3m a year for each of the next three years, will be developed into Scotland's national centre for design as part of a major rethink of how it will operate in future.
V&A Dundee is expected to forge official partnerships with businesses and organisations across the country as part of its new national role, which including helping in Scotland's economic and social recovery from the pandemic.
The funding, which is said to be critical in giving V&A Dundee "long-term financial sustainability," will safeguard around 100 jobs at the £80 million complex, designed by Japanese architect Kengo Kuma.
More than 10 years in the planning, V&A Dundee insists it is still aiming to showcase “world-class” exhibitions.
Scotland's only design museum, it had attracted a million visitors between its opened in September 2018 and last February, weeks before it was forced to close due in the face of the pandemic.
The government contributed £38m to the construction of the museum and has been the biggest contributor to its running costs with an annual grant of £1m, with the city’s universities and Scottish Enterprise contributing £700,000.
V&A Dundee’s new remit as a national institution will see it champion the value of design locally, nationally and internationally, promote design as “one of Scotland’s great resources and help boost the country’s design capacity.
Initial projects will see businesses and organisations across Scotland working with V&A Dundee to apply design skills in their work, school pupils encouraged to use design to solve problems in their lives and a project with Dundee University aimed at reducing the amount of waste created by the fashion industry. V&A Dundee director Leonie Bell said: "Like so many organisations, the impact of Covid was devastating for us overnight. This funding will really help with our ability to prosper in the long-term.
“It is totally critical and of enormous value, but the three-year time-frame is a massive vote of confidence, not just for V&A Dundee but for the whole city.
"The language we’re using around being a national centre of design is not without intent – it’s about maybe pushing against some conceptions of where centres of excellence are in Scotland and the UK.
“We’ve been talking for some time with the Scottish Government about what we can do for Scotland, but also what design can do for Scotland, and how we can be a conduit for that.
“We’ll continue to have conversations with the government and other partners about the role of design in our long-term recovery from Covid, imagining what we may never want to return to and what we want to work towards."Culture secretary Fiona Hyslop said: “Creativity and design sit at the heart of Scottish life and play a critical role in the economy, communities and almost everything we do.
"V&A Dundee has become an important part of Scotland’s cultural life and has played a unique role as Scotland’s design museum.
“By developing national partnerships with organisations and businesses across Scotland, it will contribute to Scotland’s economic recovery by promoting the benefits and value of good design.”