Attorney-General Mark Dreyfus QC and Minister for Multicultural Affairs Senator Kate Lundy were on hand at Punt Road on Thursday with Houli to announce a grant of $156,000 to the AFL to extend the cup and Leadership Program for another year.
"The Bachar Houli Program embraces Australia's diversity and builds greater social cohesion through sport," Dreyfus said.
"The Federal Government is proud to support successful projects such as this, which enable communities to challenge ideologies that can lead to mistrust and marginalisation."
Senator Lundy said: "Australia is a vibrant and successful multicultural nation because national sporting organisations, like the AFL, have embraced the benefits of our diversity.
"Bachar has been an impressive role model through his educative role at the AFL, inspiring young Muslims to become more involved in sport and the wider community."
The Bachar Houli Program provides an opportunity for students from Islamic schools to play in an AFL 9s competition, culminating in the Bachar Houli Cup.
"For me it's huge because I've always been passionate about giving back to my community," Houli said.
"To focus on Islamic schools in Victoria and to now have a national program, I can't wait to get going once again."
The Bachar Houli Cup starts in a fortnight, followed by the Academy.
Based on its success, the program has recently been shortlisted for the prestigious international Beyond Sport Award.