The rest of the $11m project budget was covered by contributions from community conservation groups, iwi/hapū, Northland Regional Council, Kiwis for Kiwi, and Kiwi Coast Trust.
About 15 jobs would be created when the five-year project was fully operational.
Allan said work would start soon on community engagement, feasibility studies and operational planning.
The Bay of Islands project was one of 16 supported by Predator Free 2050 Limited, a Crown-owned company set up to invest in landscape-scale projects and breakthrough-focussed research.
"Each involves a unique combination of landscape, cultural, community and ecological factors, creating tangible and long term social and economic benefits for all New Zealanders," Allan said.
Northland MP Willow-Jean Prime said the extra funding built on ''fantastic work'' already being done by conservation groups to eradicate pests and protect biodiversity in the Bay of Islands.