The grant approved by the Michigan Economic Development Corp. pushes the total amount raised to restore the popular attraction to $820,000, with most of that amount coming from private sources.
"It is a very unique asset, not just to the area, but to the state," Mayor Kurt Dykstra said. "We're not resting until we get it all done."
The city and Holland Township have agreed to contribute an additional $600,000 toward the project over the next six years, including for construction of pedestrian connections to the island with downtown Holland and the township.
"Good things continue to happen, and this is a huge part of it," City Manager Ryan Cotton said of the grant.
Restoration of the windmill, which has been inoperable since the spring, is expected to be finished this year.
Other work includes repairs to the gardens' antique carousel and street organ. The carousel was built in 1908 and bought in the 1970s by the city of Holland, which is known for its Dutch heritage. The organ was built in 1928 and given to Holland in 1947 by the city of Amsterdam.
Windmill Island Gardens is a popular destination for tourists, especially during the city's annual Tulip Time festival each spring. Contributions for the fundraising campaign may be made through the city's website or through the Community Foundation of the Holland-Zeeland Area.