Varuna the National Writers House at Katoomba will receive $740,000 in long-term funding over the next four years to develop and deliver multiple arts and cultural activities.
Varuna will deliver professional development and mentorship to writers nationwide, providing residencies to over 190 writers every year.
It will also present the annual Blue Mountains Writers' Festival and support a vibrant program of writing workshops and events.
NSW minister for the arts, Don Harwin, who announced the grant, said: "We are committed to supporting the NSW arts and culture sector and by ensuring extended financial stability for organisations, we will provide opportunity to enhance excellence in programming and to strengthen our community."