The Monmouthshire and Brecon canal will receive over £2.5m of Welsh Government funding for “essential work”.
It will be used to secure the embankments, reduce water leaks and repair the Talybont Aqueduct in Powys.
Over 20,000 plants over 2.8 miles (4.5km) of canal bank will be planted to increase biodiversity.
Richard Parry, chief executive of Glandŵr Cymru, which manages Wales’ canals, said he was “delighted”.
“This funding will allow us to do essential work to ensure the long term future of the canal, and deliver benefits to the local economy and enrich the lives of its many visitors and everyone who lives around it,” he said.