The money is being made available as part of a cost-sharing agreement with railways and governments that have authority over local roads.
Transport Canada says the improvements could include installing flashing lights and bells, gate barriers and other devices at crossings.
The Transportation Safety Board has said there have been 658 accidents over the last 10 years at so-called passive railway crossings, including 59 deaths and 107 serious injuries.
Studies suggest accidents and fatality rates drop significantly after grade crossing improvements are completed.
There is also money to encourage the closure of some railway crossings.
"This investment will enhance safety for pedestrians and motorists at over 600 locations across the country, and help save lives," Transport Minister Lisa Raitt said in release.
Last March the Transportation Safety Board said the federal government should conduct research into new low-cost alert systems to bolster safety at passive railway crossings.
It made the finding in a report into a collision involving a camper van and freight train near Broadview, Sask., that killed four people in broad daylight in August 2012.
The report said a Canadian Pacific Railway freight train travelling at 85 km/h sounded its horn and had its lights on, but struck the van broadside at a railway crossing that had only standard reflector warning signs.
The report warned the risk of such accidents remains until better warning systems are required at railway crossings without bells, lights and gates.