The Homes and Community Agency has agreed to contribute £605,000 towards the costs incurred in developing the plans to regenerate the site in Ditherington.
The money will also be used towards preparing the site for future development.
The organisation is one of the partners behind the restoration plans for the site, along with Shropshire Council, English Heritage and the Friends of the Flax Mill Maltings.
Andy Evans, Shropshire Council's head of economic growth and prosperity, said: "This funding from the HCA is a very important and very welcome step towards the development of the Flax Mill Maltings, and is a big vote of confidence in our plans for the regeneration of the site."
The new funding follows on from the bid for £12.8 million in funding going in to the Heritage Lottery Fund, with a further £6.6 million being sought from the European Regional Development Fund.
If the bids are successful, work could start in September, with the first phase of work due to be completed by 2016.
The plans involve restoring and bringing back into use some of the historic buildings – including the Main Mill, the Kiln, the Dye and Stove House and the Office and Stables.
Chris Smith, national planning director for English Heritage said: "The public sector partnership involved in this project has been working hard to secure a viable solution for this important site and this additional funding is a ringing endorsement of that work. The HCA's contribution is very welcome."
The Maltings site comprises seven listed buildings, including the Main Mill, which was built in 1797 and is the world's first iron-framed building and the forerunner of the modern skyscraper.
Campaigners hope to see businesses, arts groups, bars, restaurants and eventually homes created at the site, which has been derelict for almost 30 years.
A decision on the latest bid to the HLF is due in July.