An extra $224m over four years has been set aside for mental health services, through the social investment package.
About $25m a year will go on new "innovative" proposals to tackle mental health issues.
Health Minister Jonathan Coleman said the extra $879m being invested into health services for 2017/18 was the largest increase in 11 years.
"This takes health investment to a record $16.77 billion in 2017/18, an increase of around $5 billion across our nine Budgets.
"Delivering better health services for a growing country remains this Government's number one funding priority," he said.
"The additional funding will deliver a range of new initiatives to meet cost pressures as well as population growth.
Dr Coleman said the Cabinet would soon consider a new mental health and addiction strategy.
"This funding will support the implementation of the strategy and will provide greater flexibility to invest in new and innovative approaches."
Mental Health Foundation chief executive Shaun Robinson said the boost was "a pretty good investment".
"I said this morning that hundreds of millions of dollars were needed. On the face of it, that's what the Government's putting up," he said.
"About half of that's going to DHBs and I can understand that because they are under a lot of pressure ... What we badly need now is an updated strategy, a plan, about how this resource gets used."
He said the extra funding would make a meaningful difference but it needed to be a sustained investment with strong leadership and a clear strategy.
• District Health Board funding
Coleman said the extra $879m invested in health next year is the biggest increase in 11 years.
"DHBs will benefit from an extra $1.76 billion over four years to invest in services, improve access, and to meet cost pressures and population growth."
• Disability support
Budget 2017 includes an extra $205.4m over four years for disability support services used by about 32,000 Kiwis every year.
Community-based home support, personal care, caregiver support, residential care and equipment services will get an extra $178.2m over four years, and the Enabling Good Lives programme, running in Waikato and Christchurch, will be expanded with $27.1m over three years.
• Contraceptives for low-income women
Funding of $17.5m over four years through the "social investment" package will increase contraceptive access for low-income women aged 15-44 years. Free consultations will be provided to women in poor areas, including "free insertion and removal of long-acting reversible contraceptives".
• Bowel-screening programme
The Government's bowel-screening programme will start in Wairarapa and Hutt Valley DHBs in July after funding was announced last year.
New funding of $38.5m over four years will support a further roll-out to Southern and Counties Manukau DHBs next year.
Opposition parties have focused on health in election year, saying increases in spending have failed to keep pace with demand increases and record immigration.
Labour says a $1.7b gap in health funding has built up since 2010, an estimate based on the increase in Crown expenditure relative to inflation and population growth.
Leader Andrew Little has made mental health a key election issue, announcing policy to put dedicated mental health teams into GP clinics in eight centres around the country at a cost of $43m.
The Budget includes already announced spending such as a $60m boost to Pharmac to allow greater access to medicines, and $59.2m towards emergency services to allow all road ambulance call-outs to be double-crewed.
A further $1.54b is set aside for wage increases for 55,000 care and disability support workers as part of the pay equity settlement that came from court action by Kristine Bartlett.
