The Diocese of Leicester will use the money to improve its youth work structure. It plans to recruit seven full-time youth workers, overseen by a director of youth ministry.
The director, who will be in post by early autumn, will also be expected to help strengthen existing networks, develop training, improve the participation of young people and support church-based youth work.
Mike Harrison, director of mission and ministry at the diocese, said: "We are conscious that there are far fewer young people entering the Church so we decided that we would put in substantial resources of 1.2m over the next five years. We believe this change regarding the resourcing of youth work is unique in churches, and will build on the Church of England's own national youth work strategy to improve young people's participation."
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