The fund, which is backed by the London Mayor's Office for Policing and Crime (MOPAC), will help London-based organisations and communities deal with the challenges of how young and at-risk people use social media, and how professionals support them.
Knife crime levels have been rising in recent years, with official figures published in October showing that police recorded more than 41,000 knife or "sharp instrument" offences across England and Wales in the 12 months leading up to June - the highest number on record.
At the same time, concerns have been growing about the role of social media and music videos, often hosted on YouTube which is owned by Google, which some see as glamorising drug dealing and murder.
In May Metropolitan Police Commissioner Cressida Dick singled out drill music as a cause, which often has lyrics describing drug taking and violence, and asked YouTube to delete such content.
Her concerns were echoed in September by Labour's shadow treasury minister Lyn Brown during a debate in parliament, who described one drill music video filmed in her constituency as "effectively a celebration of gang murder".
Mayor of London, Sadiq Khan, who has also previously called for social media companies to toughen their guidelines around violent content, said the grants would contribute to a "long-term public health approach" to violence in the capital.
Google's grant will enable charities Catch22 and Redthread train more than 500 social and youth workers, teachers and other frontline professionals to help at-risk young people manage their interactions and experiences with social media.
Catch22 director of engagement Beth Murray said the work will hopefully result in the creation of guidelines for youth professionals on how to ethically work with young people on social media.
"How much should a social or youth worker be investigating what young people are using online?" said Murray.
"Current guidelines do not include this world. Our work will help professionals understand how they can work with young people online in a safe and ethical way."
- Serious Violence Strategy: experts advocate earlier interventions
- Experts look to public health model to tackle surge in youth knife crime
Catch 22 will also receive £75,000 of the funding to hand out to grassroots organisations that can tackle issues of disenfranchisement among young people.
From the second half of 2019, the charity will invite local schemes, such as boxing clubs, after-school clubs or organisations based in estates, to apply for the financial support.
Murray said a £500 grant could be life-changing for such a small organisation.
"Negative activity on social media is a symptom, rather than a cause, of youth violence," said Murray.
"To have a real impact on London's levels of youth violence we must tackle the cause; disenfranchised young people, who need positive people around them, a safe place to live, and something purposeful to do.
"The training will help frontline workers to understand fully how young people are using social media.
"The grassroots grants programme will directly fund those with lived experience, and we'll support talented young people to use their skills for good."