Homelessness organisations and local authorities will use the funding to find permanent homes for those in housing difficulties. They will utilise the funds to develop their transition to a Housing First and rapid rehousing approach.
The funding is part of the £50 million Ending Homelessness Together Fund along with a health funding contribution of £1.5 million over the first two years.
Housing Minister Kevin Stewart made the announcement during a visit to Edinburgh City Council's homelessness service staff.
He said: "I would like to thank the Homelessness and Rough Sleeping Action Group for their hard work and dedication over the past nine months. We know that homelessness is not solely a housing issue and we are committed to tackling the wider risk factors of homelessness and rough sleeping, including poverty and the increased risk of homelessness due to UK Government welfare cuts.
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"Our significant £21 million investment will include up to £4 million to support local authorities in the five cities participating in the joint Social Bite and Corra Housing First initiative.
"This funding will ensure we support people at times of crisis, while also taking an important step towards transforming the system and offering rapid routes back to settled housing.
"Our focus on prevention has contributed toward a 39% fall in homelessness applications in the last ten years. We want to build on these strengths and accelerate progress."
Jon Sparkes, Chair of the Homelessness & Rough Sleeping Action Group and Chief Executive of national homelessness charity Crisis, added: "Everybody in Scotland deserves the dignity and stability of a safe and stable place to live, so we are very pleased the Scottish Government has accepted our recommendations to tackle homelessness across the country.
"Right now far too many people are either at risk of becoming homeless, or are already stuck in temporary accommodation or sleeping on the streets. When we know what it takes to end homelessness, this just isn't right.
"We welcome the government's pledge of vital funds to house people more quickly, and to provide the crucial support they need to leave homelessness behind for good. In addition, we have called for public bodies – such as hospitals, prisons, and social care services – to play a role in preventing homelessness, and for the government, local authorities and social landlords to build the social housing we need to truly meet demand.
"Now is the time for action, and we look forward to working closely with the Scottish government to make these plans a reality so that ultimately, homelessness in Scotland can be ended once and for all."
(CM/MH)
