The package also places a strong emphasis on improving housing outcomes, with $380m set aside to deliver 1000 papakāinga homes, among other measures.
A further $350m had also been secured in the Housing Acceleration Fund, targeted to investment in infrastructure to support Māori and iwi providers build homes for whānau Māori, bringing the total for Māori to $1.4b.
It comes after over $900m was set aside in Budget 2020, largely to deal with Covid-19 shocks, and which was then labelled "unprecedented".
Māori Development Minister Willie Jackson said the Māori Ministers and wider Māori caucus were "very proud" of the Budget.
"We have never got the type of money we got today. The priorities are housing and health - our people demanded this."
The housing package is expected to deliver 1000 new houses that will be a range of papakāinga housing, affordable rentals, transitional housing, and owner-occupied housing.
Funding will also cover repairs for 700 Māori-owned houses improving the quality of homes for whānau in most need, led by Te Puni Kōkiri.
Funding will also go to strengthen Māori and Iwi Housing Innovation (Maihi) approaches and partnerships with iwi and Māori to deliver more whenua-based housing and papakāinga.
It is designed to help address low Māori home-ownership rates, at 31 per cent compared to the national average of 52 per cent.
A $30m boost will go towards building future capability for iwi and Māori groups to accelerate housing projects and a range of support services.
Housing expert Jacqueline Paul said the increase in funding would be critical to supporting whānau across Aotearoa.
"Many Māori are living in severe housing deprivation and with declining homeownership rates and increasing rates of homelessness." Paul told the Herald.
"It's really difficult to see the realities of many whānau struggle to put food on the table and use a high proportion of incomes towards housing costs."
"Additionally it is great to see the recognition of Maihi again in the budget which I view as the most current progressive Maori housing policy with a strong focus on partnerships.
"This is something to look forward to and many iwi, hapu and marae operating in the sector will be able to access these funds.
"Although it won't address the increasing demand and need for housing Māori, the detail of ringfencing of funding for infrastructure is important to note due to lack of infrastructure especially in rural areas."
The funding for Māori health includes $98.1m for establishing the Māori Health Authority, $17.8m to support of iwi/Māori partnership boards and $126.8m for Hauora Māori programmes run by the Māori Health Authority including funding for increasing provider capability and a Māori health innovation fund.
Lady Tureiti Moxon, managing director of primary health organisation Te Kōhao Health Ltd and a key claimant in a health Waitangi Tribunal claims, said she was "very pleased".
"Especially about the Māori Health Authority and the establishment of commissioning.
"It's been a long time coming and a credit to all those who have worked hard since 2005 who have worked hard to keep this kaupapa in mind's eye."
Finance Minister Grant Robertson said the funding allocated was only to get it established, with exact funding yet to be determined.
Moxon said she was disappointed the Government had not allocated any further funding to Whānau Ora.
"Child poverty continues to grow so we must never be complacent about this," she said.
Whānau Ora Minister Henare said while he had asked for more money and was turned down, last year's Budget included a $200m boost over two years for the organisation.
