Under the new funding agreement, Play Wales will be tasked with helping Welsh local authorities to meet their statutory duties to provide play opportunities and develop an international centre of excellence around play.
The move comes three months after Play Wales was turned down for funding through the Welsh government’s children and families delivery grants (CFDG).
The independent charity feared the bid knockback would force it to close unless further funding was found, and all staff had been issued with 12-week redundancy notices in July.
Confirming the funding reprieve, a Welsh government spokeswoman said: “We have issued an offer of just over £400,000 to Play Wales. This is not core funding – it is for specific activities to be delivered over 18 months, which will directly support our key priorities around play and tackling poverty.”
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