Halifax Transit is getting an extra $2 million in provincial money each year to improve service, it was announced on Thursday.
Municipal Affairs Minister Mark Furey said the funding will cover capital costs of providing public transportation.
Riders take more than 100,000 trips on city buses and ferries every day.
The initiatives are part of the 2014-15 budget to provide financial assistance for the capital and operating costs of public and community transit systems.
"We understand the role a robust public transit system plays in a healthy and vibrant city like Halifax," said Furey. "Having accessible and reliable transit services helps those who live, work and go to school in our capital city, and it reduces our environmental footprint."
New Lacewood Drive terminal
Half of the funding will support the construction of a new bus terminal on Lacewood Drive.
"Just last week we unveiled the new branding and now we're at the site of what will be a beautiful new terminal for the hundreds of passengers that pass through this area every day," said Halifax Mayor Mike Savage.
"Not only will this funding help move this project along, it will play a significant role in the coming years as Halifax Transit implements other changes that will deliver transit services in more advanced and innovative ways."
The funding for Halifax is one of three public transit initiatives, totalling $3.5 million, the province is delivering to provide transportation options for Nova Scotians where transit services are available.
Municipalities and community organizations outside Halifax Regional Municipality are receiving $1.5 million to provide and maintain public transit.
Halifax Transit used to be known as Metro Transit.