The Government says around 64,000 people will benefit from improved access to driver licensing testing and training as part of Budget 2022.
Social Development and Employment Minister Carmel Sepuloni and Transport Minister Michael Wood made the announcement on Wednesday.
Sepuloni said the Government expects the increased funding will help get more people into work.
"Having a driver licence is a key requirement for up to 70% of jobs, yet a big portion of our community can't access training or tests due to the costs and other barriers. This disproportionately disadvantages Māori, Pacific peoples, sole parents and rural communities."
Wood said the investment will allow agencies such as Waka Kotahi NZ Transport Agency to expand access to driver licence support and improve access to testing.
This includes increasing driver testing officer capability and capacity.
"Removing the barriers to driver licence training not only helps to prevent fines, court and the risk of criminal penalties, but may also save lives and reduce the devastating impact a serious crash can have on communities," he said.
Sepuloni said the extra support will also address critical equity issues caused by people not having a driver licence.
"There are many people in our prisons whose journey to criminal records started with driving fines for driving without a licence. Today is a big step towards changing this."
Wood felt similarly, stating: "This initiative will help reduce debts from fines for not having a driver licence and the related risk of getting a criminal record. It will increase the options available for police referrals and help offer more driver training support."