Last week, there were calls for the government to support the airport after Ryanair – the facility's main air carrier – said it was to drop a number of its services from the city next year.
A £7m package has been decided upon to help the airport plan for the future.
City of Derry Airport is owned by Derry City and Strabane Council. Currently, it is running at a loss of more than £2m a year, and it is not expected to break even until 2021.
Of the funding, £2.5m is thought to be used for route development and attracting new airlines to the facility. An additional £4.5m will be invested in the airport's infrastructure.
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First Minister Arlene Foster said: "This £7 million package ensures the airport remains a key gateway to the North West for business and leisure travel. The Council also has plans for further development which would bring employment opportunities to the area and we want to act as a catalyst for it to succeed.
"This announcement is part of our plan to help deliver economic prosperity in every part of Northern Ireland. Indeed, the plans to invest in capital works will be a welcome boost to the construction sector in the North-West as well."
Deputy First Minister Martin McGuinness added: "Connectivity is a pre-requisite for economic development which made this £7 million investment in the City of Derry Airport vital.
"This £7 million package will enable the City of Derry Airport to invest in route development and capital projects which will create high value jobs and training opportunities. I have been actively engaged in discussions with the City of Derry Airport and the local council for a number of weeks."
(JP/LM)
