The Selinger government has set aside $100 million as a down payment to rebuild homes and infrastructure in four Interlake First Nations ravaged by flooding in 2011.
The announcement Tuesday came on the heels of a similar commitment by the federal government this past Friday.
Aboriginal and Northern Affairs Minister Eric Robinson said the money will help address past and future claims with respect to flood damages caused by the operation of the Fairford River Water Control Structure.
The four First Nations -- Lake St. Martin, Little Saskatchewan, Dauphin River and Pinaymootang -- are all downstream of the control structure, which was built in 1961 to regulate Lake Manitoba water levels.
The federal government says 1,888 First Nations residents are still displaced by the 2011 flood. More than 1,600 of them are from the four First Nations.
Lake St. Martin and Little Saskatchewan residents need new homes on new land, while the other two communities require a combination of new homes and better flood protection on their existing reserves.
Robinson said the two senior levels of government have made progress in negotiating a permanent solution with each of the First Nations. Ottawa will pay 60 per cent of the costs, he said, while the province will pick up the other 40 per cent.
"I think this will be welcome news that we are making progress," he said of the financial commitment. "It's been way too long that the people have been away from their communities. And, obviously, they want some feeling of being settled again, and we're working towards that."
However, the announcement caught leaders of at least two of the First Nations by surprise on Tuesday.
"I wonder why we weren't invited (to the announcement). Usually, we're invited for something like that," said John Sanderson, a band councillor with Pinaymootang First Nation.
"I didn't know anything about it," said Chief Adrian Sinclair of Lake St. Martin First Nation.
Sinclair said he was told by a federal official a month ago a funding announcement was in the works but he wasn't told the amount. He was reading the provincial government's press release when a reporter called him for comment.
"I don't really want to make any statement right now," Sinclair said. He said he wished to meet with his council and seek legal advice before commenting.
In April 2012, a handful of residents from all four First Nations filed a $950-million class-action lawsuit against the province, alleging the government deliberately flooded their communities.
Their statement of claim said the province "knowingly and recklessly" caused the disaster in their communities by diverting too much water into Lake Manitoba in the spring of 2011. It also alleges the province failed to provide them with sufficient warning.