The new funding comes at a time when more than four in five adults are worried about the impact that coronavirus is having on their life right now.
More than half say it has affected their wellbeing and nearly half have reported high levels of anxiety, according to Public Health England.
The agencies set to benefit from the funding are Telford Mind, Branches, CRUSE, Severn Interventions Services, Challenging Perceptions, IMPACT, and Merulae.
It will allow them to deliver listening and one-to-one support for mental health and bereavement support over the phone and video chat; online support groups; support for parents to help their children cope with loss as a result of coronavirus and a dedicated support offer to staff working in care homes in Telford.
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Andy Burford, Telford & Wrekin Council's cabinet member for health and social care, said: “The coronavirus crisis is a huge time of change and uncertainty for everyone, and sadly more of us are going to have to deal with feelings of loss.
“It’s important to provide extra support to local organisations at this time, to help us look after our mental health.
“If you are experiencing stress, anxiety or concerns about your mental health during this time, there is help out there – don’t be afraid to ask for it.
“It’s important to take care of yourself and do what you can to manage your wellbeing.
“The council will continue to work hard with local organisations to secure more funding from national pots to further improve local mental health support.”
A comprehensive list of mental health support available locally and nationally can be found at telford.gov.uk/mentalhealth