The Scottish Government pledged up to £300,000 to help the 13 householders whose homes were discovered to be sitting on the site of a Victorian calico printworks in the Stirlingshire village.
The Scottish Government cash comes on top of a £255,000 offer from the UK Government and a further £125,000 from Stirling Council, who discovered the contamination during a routine survey two years ago.
The residents mounted a nationwide publicity campaign to fight for assistance on a calamity which would have wiped at least half the value from their homes.
Blanefield resident Martin McGougan said: "A weight has been lifted off our shoulders today. The past two years have been very stressful for me and the 12 other neighbours involved.
"We've had huge bills that we've had no ability to pay hanging over our heads and it's been a terrible financial and emotional burden for us.
"The Scottish Government's fantastic contribution means that for the first time in two years we can take our lives off pause and get on with normal life again."
He added: "We are absolutely delighted with the Scottish Government's contribution of up to £300,000. It's a huge amount of money to us and means all the work can now be done.
"This excellent result is the culmination of us campaigning and working in partnership with Stirling Council, residents within the affected areas, the Strathblane Community Council and our local MSP Bruce Crawford who has championed our cause since the beginning."
The householders had no inkling of the deadly legacy of the Victorian printing plant when they bought their homes. The hazard emerged during a routine inspection by the local authority two years ago.
The residents took their plight to a UK-wide television audience after it was featured on the One Show on BBC last week. This prompted the UK Government offer and in turn the Scottish Government offer yesterday.
Finance Secretary John Swinney said: "It is inexcusable that residents affected by the contaminated land have not only had to worry about the risks to their health, but have had to live in fear of being held financially responsible for the cost of the removal of the waste.
"That's why we have now pledged up to £300,000 to help residents meet the costs of cleaning up this contaminated land."
He added: "Landfill tax and the decision to exempt disposals of contamination is currently a matter for Westminster.
"If the UK Government waived the tax costs associated with the clean-up when the lead and arsenic were first discovered, residents would not have had such an ordeal."
Mr Swinney also said that the Scottish Government is now taking steps to ensure that once landfill tax is transferred to Scotland, other residents will not find themselves in a similar situation.
He added: "I now hope our contribution means the hazardous waste can be removed in a timely fashion, and people in Blanefield can get on with their lives."
Announcing the UK Government assistance last week, Treasury Secretary Danny Alexander said: "I am pleased we are able to ring-fence this funding for the residents of Blanefield. I hope the Scottish Government will also help to solve this problem, and that this can be resolved as soon as possible."
Stirling Council's environment committee convenor Councillor Danny Gibson welcomed the rescue package as a relief to local residents.