The grant is the largest awarded by the foundation in the northeast of England.
New facilities, including a pavilion and a floodlit artificial pitch, will be built at the run-down Grayfields Recreation Ground in Hartlepool.
Almost 1,500 players a week are expected to use the site, which will become home to 20 junior football teams from the surrounding area.
The ground will also be used to promote community engagement projects and reduce levels of antisocial behaviour.
A spokesman for Hartlepool Borough Council, which received the grant, said: "Grayfields has always been a very popular facility for young people, but in recent years it has been targeted by vandals.
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