Sage said the money would be used to help improve the health of lakes, rivers and lands suffering from invasive weeds and pests.
It will double the agency's funds to $2 million annually, specifically for controlling lagarosiphon, or lake weed.
The money will allow Linz, working with consultancy Boffa Miskell and the National Institute of Water and Atmospheric Research (Niwa), to increase surveillance of lake weed, as well as to improve the monitoring and evaluation of control activities such as hessian matting and herbicide spraying.
Sage said although lakes such as Lakes Wakatipu and Wanaka were clean and healthy they still required protection.
"An ounce of protection now is worth a tonne of cure."
Boffa Miskell biosecurity project manager Marcus Girvan said a key threat to lakes, which will benefit from the funding, is lagarosiphon.
Lagarosiphon was first found in Lake Wanaka in 1972.
"This new funding will add much-needed effort to our biosecurity operations, as well as surveillance into those waterways that don't currently have [such] weeds," he said.
"The threats that are posed to us here are significant and our natural heritage is certainly at risk, so we are very grateful for that new funding."
Guardians of Lake Wanaka chairman Don Robertson said he was pleased about the funding, which he was not expecting.
"These lakes look pretty good, they smell pretty good, they taste pretty good, but they are changing, and most of those changes you can't see. These changes, some of them, are bad, some of them are big, and some of them are long-lasting."