The aim of the funds is to help organisations to make the transition to new arrangements following changes to housing related support funding that will come into effect later this year.
Homeless charities will be able to bid for funding to help with the transition to new models of working and partnerships.
Louise Goldsmith, Leader of West Sussex County Council, said: “We are acutely aware that making the changes required may be difficult for some organisations who help some of our most vulnerable residents.
“We have listened carefully to the feedback from the public, our partners and the select committee and have identified additional funds to help them during a potentially difficult transition.
“This funding could be used to help create some alternative and creative solutions to some very difficult problems. At all times West Sussex County Council Adults’ Services and the Cabinet Member for Adults and Health, Amanda Jupp, will be there to help.”
The revenue budget for 2019-2020 goes before Full Council on 15 February for final approval.