Council will contribute in-kind support of the same amount.

Chief executive Tony Doyle said the program included initiatives that would address settlement issues.

He said the program would also develop a range of solutions to support the confidence and capacity of Karen people in interacting with businesses and services.

"Since 2009, about 180 Karen people have settled at Nhill, making up almost 10 per cent of the population," he said.

"Most come from refugee camps in war-torn Burma."

Mr Doyle said the settlement of the Karen people had provided tremendous benefits to the Nhill community, businesses and to the Karen people who had made Nhill their home.

"The Karen people can enjoy a safe and prosperous life here for the first time in their lives," he said.

"Their arrival has also built on Nhill's economy by arresting the town's declining population and providing a secure workforce, allowing our businesses to expand."

But Mr Doyle said the lack of support services at Nhill was a challenge for Karen residents.

"Most of the challenges our Karen community face stem from language barriers, which affect every aspect of day to day life," he said.

"These include basic tasks such as banking, job-seeking and education which affects their ability to engage with the broader community."

Mr Doyle said the project demonstrated Hindmarsh Shire Council's alignment with the State Government's commitment to multiculturalism.

"A successful and prosperous Karen community at Nhill will make us a model of regional development, as well as enriching the lives of all the people who live here," he said.