The site is believed to be the last camp of Australian prisoners of war on the infamous 250 kilometres Death March from Sandakan in 1945.
The grant was provided under Australia's "Overseas Privately-constructed Memorial Restoration Programme".
It will be used fence the site where the remaining survivors of the death marches were murdered by their Japanese captors.
"The funding will help protect the largely untouched site from wandering livestock, unauthorised entry and ensure it is preserved into the future," said Australia's Minister for Veteran Affairs Alan Griffin in a statement.
Griffin paid tribute to his compatriot, historian Lynette Ramsay Silver, for her efforts to establish the memorial park with the landowner, community leader Dr Othman Minudin.
"Their effort has ensured that this important part of our wartime history is preserved and protected for many years to come," Griffin said.
The memorial was dedicated on Aug 27, the anniversary of the day the last 15 surviving PoWs were murdered 12 days after World War 2 ended.
Through Silver's initiative, relatives of the Australian PoWs will attend a grand memorial service at the site next August in conjunction with Anzac Day.
More than 2,400 Australian and British soldiers died at the Sandakan PoW camp and on the death marches. Only six escaped and survived with the help of the local people.
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