The province announced on Sunday that it would provide funding from its disaster recovery program for homeowners to rebuild or relocate to new locations outside flood risk areas.
There will also be funding available through the same program to protect buildings within a flood fringe area with infrastructure such as berms, or by raising a house.
But the government says homeowners in a flood fringe who do not implement mitigation measures to protect against a one-in-100-year flood will not be eligible for the same assistance if there's another flood.
Premier Alison Redford has already announced an initial $1 billion to kick-start recovery from devastating floods that hit the province last month.
The government says it will introduce legislation this fall to forbid municipalities from approving new developments in floodways, and it says anyone whose property is in a floodway will have it noted on their land title.
"We want to give Albertans with flood-damaged homes the information they need to make choices to get their lives back on track," Municipal Affairs Minister Doug Griffiths said in a news release.
"We also want to ensure we're spending responsibly and doing everything we can to prevent flood damage like this from happening again."
The province says land that's made available by Albertans moving out of flood risk areas would be used for municipal flood mitigation infrastructure or for recreational use such as picnic areas, parks, cycling and hiking paths.
The region that was hit by the recent flooding also suffered serious but less destructive floods in 2005. A government report completed the next year recommended that development on flood plains be restricted. It also suggested that buildings in high-risk flood zones not be eligible for disaster recovery payments.
But the province didn't act on the recommendations.
The government said Sunday the new policies will bring Alberta in line with provinces such as Manitoba, Ontario and Quebec which it said also limit on development in flood hazard areas.
"No eligible homeowner with flood damage will go without financial support. But when we're using Albertans' tax dollars, we need to empower those receiving funds to make responsible choices. That's what Albertans expect," said Griffiths, who is also the leader of the province's disaster task force.