The joint Merseyside Youth Alliance project will focus on the prevention of serious violence, tackling gang culture and protecting young people from exploitation.
The scheme will deliver early intervention programmes targeting young people aged eight to 19 across Merseyside, particularly in areas in south Sefton, north and central Liverpool, Huyton and Toxteth, where violence is at a high.
The funding has been provided by the Home Office's Early Intervention Youth Fund (EIYF) following a bid put forward and endorsed by the police and crime commissioner for Merseyside, Jane Kennedy.
LFC Foundation's interim head, Jenny Stewart, said: "This joint project is a great example of Merseyside organisations coming together for a greater good of the city. This additional funding will enable us to expand our many existing programmes with Merseyside Police that support thousands of young people across the region to tackle youth and gang crime."
Overseen by the police commissioner, the project aims to identify and gain the trust of young people and engage them in voluntary activities at schools, youth clubs and centres and through outreach work which will help them to understand and move away from potentially dangerous and criminal situations.
It will also focus on supporting young people to identify their own strengths and develop their skills, helping them to build a more positive future.
With the funding, the Merseyside Youth Alliance project will recruit specialist school workers and youth workers who will develop key relationships, support schools in target areas and be able to mentor students confidentially.
'Speak Up' campaigns will be developed within schools to encourage young people to share any concerns they have in relation to gang culture or violent crime. Teachers and staff will also receive training to identify those at high risk of becoming involved in gang activity.
Kennedy said: "Reaching young people before they are targeted by more sophisticated individuals who draw them into a dangerous, criminal lifestyle is essential if we are to break the cycle of gang-related violence in our communities.
"I was really pleased to be able to work with these four really effective organisations to put forward this bid and I'm delighted that the Home Office has clearly recognised the importance of this project by allocating the full amount requested of £700,000.
"With this money, we can work in the most troubled communities to target the young people most at risk of harm, building their confidence, equipping them with new skills and encouraging them to strive for a brighter future.
"With two of the country's biggest football clubs on board, the experience of the Prince's Trust and the experience, community knowledge and understanding provided by the Shrewsbury House Youth Club, this project can have a huge impact transforming the lives of hundreds of potentially vulnerable young people, but also have far-reaching benefits for their families, schools and the wider community.
"If we can reduce the number of young people entering gangs and becoming involved in serious violence, it will improve lives across our region."