The money will be divided up among the 32 towns and cities across southern Ontario that requested financial help from the province, including Toronto.
But the dollar figure could change, given that some municipalities are still cleaning up from the storm, she said.
The costs the province will cover include warming centres, additional police expenses and cleaning the debris left by the storm, she said. But it won't pay to replace downed trees.
However, the municipalities had said the recovery efforts could cost more than $250 million, including $106 just for Toronto.
Those were rough estimates that may have included items like regular working hours of municipal staff, rather than just overtime, Jeffrey said.
Toronto originally asked the province to cover spring flooding costs and hydro costs, which weren't eligible for compensation, she said. The new, one-time program the province has created will only cover the costs of the ice storm.
Toronto council has revised its figure to $86.5 million.
The provincial government is still working with municipalities to assess the damage and the full cost, Jeffrey said.
"I think we'll actually get them more than they've actually asked for," she said.
The money will likely flow within the next few months, Jeffrey said, but it's difficult to know since some municipalities are still cleaning up.
The pre-Christmas storm downed trees and hydro lines, left hundreds of thousands of homes and businesses without power for days and stalled road and air travel.
Councils in many municipalities, including Toronto, Mississauga, Brampton, and Caledon, had voted to ask the province that they be declared disaster areas after the ice storm.
Mayors had asked the federal and Ontario governments to each cover a third of the cleanup costs from the storm, which left people shivering in the cold and dark for days until power was restored.
The municipal leaders said property taxes alone could not fund the recovery and gave the province until March 1 to respond.
Jeffrey said the province is seeking financial help from Ottawa, since the costs associated with the ice storm qualify under a federal program that provides assistance when the province's eligible costs exceed $1 per capita.
In their recent penny-pinching budget, the federal Conservatives also earmarked $200 million over five years to establish a national disaster mitigation program.
But that's not enough, Jeffrey said.
"Based on what's been happening in the last year — whether it's flooding or an ice storm — certainly there appears to be more climate-change events that are happening across Ontario and probably Canada," she said.
"So we're putting them on notice that in Ontario, we're prepared to pay 100 per cent of those eligible costs."
At least two big city leaders hailed the province's move.
"They listened and they responded," Mississauga Mayor Hazel McCallion said Wednesday in Ottawa. "What more can you ask for?"
Toronto is getting all the assistance it sought from the province, said deputy Toronto mayor Norm Kelly.
"This is not just good news, this is great news," he said. "I'm delighted to hear it."