Students in Northern Ireland are to receive a £500 payment to reflect the disruption to studies caused by the pandemic.
All students from the UK or EU currently enrolled on a full-time higher education course in the north will receive the one-off discretionary payment.
An estimated 39,900 students will be eligible.
Overseas students from outside the EU are not eligible.
The scheme will cost £22 million.
The initiative is part of a wider financial support package of almost £38 million for higher education signed off by the Stormont Executive today.
Ministers had already approved £10.4 million of this spend on Tuesday.
Economy Minister Diane Dodds, who has responsibility for higher education, said: "I am acutely aware that students in local higher education institutions have experienced significant disruption since the onset of the pandemic and that this continues to have an impact.
"I am pleased to confirm that I have secured £22 million from the Executive to fund a one-off discretionary payment of £500 to all students from the UK and EU who are in full-time higher education in Northern Ireland, whether that is in a university or further education college setting."
The minister said the Covid Disruption Payments will be issued to students by the end of March.
The support package also includes:
- £8.5 million to address student financial hardship, digital poverty, and to support student unions with mental health provision;
- £4.1 million for the provision of a safe working, learning and research environment; and
- £3.1 million to compensate universities for lost income arising from rental pauses and releasing students from accommodation contracts.
Ms Dodds said: "These additional resources will help universities target financial support at those students who are most in need.
"Many students do not have adequate access to devices or the connectivity they need in order to participate in online learning. Digital poverty must not be a barrier to learning and this additional support will help address that.
"Also included in this package is funding specifically for student unions to help them increase the mental health and wellbeing support they provide to students.
"Furthermore, the institutions will receive funding to help them carry out modifications and invest in PPE and other equipment to ensure they can deliver teaching and learning in a Covid-compliant way."
The minister added: "I have listened to the many concerns raised with me by students, their representative bodies, family members, educators and institutions, and will continue to do all I can to help them regain the learning experience they deserve.
"Students who are in immediate need of financial support should contact their institutions to discuss their options."
Queen's University and Ulster University welcomed the intervention.
Queen's University Belfast president and vice-chancellor Professor Ian Greer said: "We particularly appreciate and will prioritise the allocation of targeted government funding for those students in most need.
"Queen's will use its best endeavours to ensure this reaches students as quickly as possible, especially those from disadvantaged backgrounds, those experiencing mental health difficulties, and those who do not have reliable access to digital technology that facilitates remote learning."
Professor Paul Bartholomew, vice-chancellor, Ulster University, said: "We understand that student life during a pandemic can be an anxious time and are committed to supporting our students academically and personally.
"Our student wellbeing team is on hand to help, with all services available online, including financial support.
"We will work closely with the department to distribute these additional funds to our students as soon as possible."
