Galveston officials say the government block grant will go toward a new water line from Pelican Island to Galveston.
City engineer Justin Bowling says the goal is to avoid total water failure like what happened when Ike swamped Galveston in September 2008.
The Galveston County Daily News reported Friday that the 20-inch line will run under the ship channel. The system will connect, through a University of Texas Medical Branch elevated water storage tank, to the existing water infrastructure.
Crews next week are scheduled to start demolishing part of Holiday Drive.
Bowling says the water line project should be completed by late summer.