The Scottish Government money follows the publication of a report into the problem which was published last year.
The independent Advisory Group on Tackling Sectarianism, set up by community safety minister Roseanna Cunningham, called on public bodies to create more "imaginative anti-sectarian partnerships".
It recommended a challenge to "the environment of friendly indulgence or passive acceptance of sectarian 'banter'" similar to approaches taken towards racism, gender inequality and homophobia, and called on local authorities to address problems with "conviction and confidence".
About £860,000 has been pledged in the latest funding announcement, with almost half going to the Citizen's Theatre in Glasgow to host plays and workshops with school pupils from North Lanarkshire as part of a project titled Divided City.
Organisers believe staging a drama "provides a unique way of exploring" the issue among children and can lead to meaningful changes in attitude.
Other groups to benefit from the funding include Deaf Connections to create online resources for deaf people, campaign group Nil By Mouth to work with schools, and Cambridge University will receive £100,000 to research and increase community engagement around anti-sectarianism projects.
In line with recommendations of the report, projects are to be evaluated to assess their effect on those involved.
Ms Cunningham said: "When taking on the portfolio for tackling sectarianism I set myself two key tasks - to ensure communities were at the heart of work to tackle it and to improve our knowledge and understanding of sectarianism by ensuring our work is based on robust evidence of what works.
"We are moving in the right direction and the work of the advisory group - to whom I am very grateful for their detailed recent report - has been hugely important in supporting and focusing our work.
"Its far-reaching recommendations are not simply aimed at the Scottish Government and I look forward to hearing how other bodies have considered the actions which impact on their areas of influence and control."
Divided City director Guy Hollands said: "Religious intolerance and sectarianism are issues that continue to affect young people in Scotland today and we believe that drama provides a unique way of exploring those conflicts.
"Following previous incarnations of this project, we've seen tangible shifts in attitudes from audiences and participants far exceeding our expectations.
"We're delighted that with the support of the Scottish Government, and in partnership with North Lanarkshire, we're able to reach a greater number of young people and their families and communities than ever before, and provide an important platform for discussions around this important issue.
"In this version of our long-running project, we're working with teachers to empower them to continue to deliver dramatic performances and tackle difficult issues in an inspiring and engaging way."