In a statement released by the club on Saturday, chief executive Steven Wright said that Richmond had been working in close association with the Department of Education, Employment and Workplace Relations for some time on the proposal.
"The Richmond Football Club is grateful to the Deputy Prime Minister and DEEWR for supporting this very important Indigenous initiative," said Wright.
At the heart of the project is the creation of the REAL (Richmond Emerging Aboriginal Leadership) camps which are aimed at developing personal growth, skill acquisition, role modelling and mentoring, and health and lifestyle education.
Richmond midfielder Richard Tambling has been a vocal supporter of the proposal.
"This is a great day for bridging the gap with indigenous kids and there is no better way to do it than through footy, given over 87,000 indigenous people are involved in AFL Australia wide," he said.
The announcement comes on the back of the commencement of work at Punt Road Oval, as the redevelopment of the ground gets under way.
The Institute will be part of the $20 million facelift which will see Tigerland gain new indoor facilities, and undergo ground improvements and drought proofing.
The Institute will co-share the Punt Road facilities, which Wright believes will be returned to its former iconic status.
"Punt Road Oval will once again become a centre of community life for the residents of inner Melbourne," Wright said.
Visit richmondfc.com.au to read the full press release
