The hamlets of Cambridge Bay and Kugluktuk will evenly split $146,000 to put towards youth programming in each community.
Keith Peterson, mayor of Cambridge Bay, said the money will be used to establish a youth centre in town.
The hamlet will make use of the old municipal library, which is now vacant, for the centre. Peterson said the building is in good shape and just requires some renovations to make it suitable.
"We have to add kitchen facilities and do some electrical and plumbing work," said Peterson.
The entire project will cost $100,000 and includes funding from the Government of Nunavut.
Aside from the building upgrades, the funding will also be used to hire a youth counsellor.
The position, funded through the Department of Health and Social Services, will operate out of the centre.
"The person will be available when youth are out and about," said Peterson.
He added that he hopes the project will provide youth with a sense of ownership in the community and increase their community profile.
"Half the population is under the age of 25. We want to raise their profile in town as an important group," he said.
It is hoped the centre will be running by April.
The community of Kugluktuk will use its share of the funds to upgrade their existing youth centre.
Rachael Horn, community wellness co-ordinator, said new furniture will be purchased for the facility.
Funds will also be used to develop leadership training and for a youth elder camp in the spring.
Both groups applied for funding under the auspices of the Kitikmeot Inuit Association back in August.