The money, which was given to the young people-run Phoenix LGBT Youth, will pay for a development worker.
The worker will support young LGBT people and raise awareness of the issues among other youth professionals in the area.
Dumfries Youth Enquiry Service will help supervise the role.
Debbie McDowall, project co-ordinator at the service, said: "It is the first role of its kind here and is something we've been trying to achieve for years."
The amount of funding given was due to be finalised this week. Phoenix LGBT Youth is also seeking additional funding to support the role.
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