The federal and B.C. governments, and the City of Vancouver, announced the money would amount to $50,000 each.
The offer is intended to provide the children of Pickton's victims with opportunities to enhance their education, housing, or other circumstances, the province said in a press release sent out Tuesday morning.
"The new fund makes compensation available to all known, living, biological children of the women identified in the MWCI report as missing or murdered," the release said.
On Monday, lawyer Jason Gratl announced that $50,000 settlements were being accepted by 11 of 13 families who were parties in a civil lawsuit against the three levels of government.
The civil suit was launched last May by the children of four women whose remains and DNA were found on Pickton's Port Coquitlam farm after his arrest in 2002. Other families had since joined the civil action.
The lawsuit claimed police and the Crown failed to warn women on the Downtown Eastside that a serial killer may have been on the loose and raised concerns about the way police eventually told the missing women's families that their cases were linked to Pickton.
Pickton was convicted in 2007 of six counts of second-degree murder and is believed to be responsible for the deaths of dozens more.
Establishing a compensation fund for families of the victims was one of the key recommendations that came out of the Missing Women Commission of Inquiry.
"In offering the compensation, the three funding partners are hopeful they will reach a settlement with the 13 litigants involved in an ongoing civil action related to the loss of their mothers," the province said in its statement.