"This is a big boost," said Adamie Ashevak, a member of the board's foundation.
"It will definitely help the foundation keep going in the future."
Okpik Pitseolak, an Iqaluit artist and vice-president of the foundation, said the money is needed to continue the foundation's work.
The money will help the foundation promote Nunavut artists by providing grants and through their publication, the Inuit Art Quarterly.
Pitseolak said four Inuit students went from Ottawa to the high Arctic to learn about the art, which is an example of how the money will be used.
"The money will be spread through Nunavut and Canada," she said.
Northern Development Minister Robert Nault said "it's important to use the art and culture as an economic tool for the North."
The announcement was planned for Cape Dorset, a community well known for its artists, but was diverted to Iqaluit by bad weather.
"I'm very disappointed we couldn't go to Cape Dorset," said Nault. "We would have been able to see first hand the wonderful work the artists are doing."