The UNESCO World Heritage site is among 8 cultural centres sharing £18 million in coronavirus funding.
The Oxfordshire birthplace of Sir Winston Churchill will receive £1,896,000 for extensive repairs and updates to exhibition areas for visitors when it is safe to reopen.
Ronnie Scott’s Jazz Club and The Lowry in Salford are among eight cultural organisations and venues which will benefit from the Government’s latest round of coronavirus funding.
London’s Academy Music Group, the Marlowe Theatre in Canterbury and the London Venue Group, which is headed up by Mumford & Sons star Ben Lovett, will all receive emergency funding.
More than £18 million will be distributed to the eight bodies as part of a second round of grants between £1 million and £3 million.
Blenheim Palace says the grant will help support jobs and boost the local economy in the wake of the coronavirus pandemic.
It will create a brand new exhibition on the life of Winston Churchill - which 'will be designed specifically to appeal to a family audience and will incorporate newly-created audio visual guides.'
The money will also help fund a major new feature within Blenheim's historic stables and provide a fully-accessible route to the formal gardens for the first time.
Blenheim Chief Executive Dominic Hare has hailed the grant as an 'amazing shot in the arm' for Oxfordshire tourism.
"We are utterly delighted to have secured this wonderful grant which will help us deliver a raft of crucial projects to ensure we can give as many visitors as possible the best and safest welcome next year and onwards," he said.
"This grant doesn't just support the 1.3m people who visit and relish Blenheim Palace every year, or the 400 people who work here, or our ability to restore and share this precious World Heritage Site, although it does all of those things.
Dominic Hare added: "This grant also helps safeguard the 2,500 jobs in other businesses who we support, it supports the £53m our visitors spend outside our gates, it supports the £126m we create in the wider economy and it supports the £2m we raise for great causes every year.
"It is also an amazing shot in the arm for Oxfordshire tourism, for which we are proud to play a major supporting role, drawing valuable tourists from around the UK and the world into the area.
"It will make us truly resilient as we move through the pandemic, it will make us an even safer site to visit and gives us a massive boost as we embrace the challenges of next year," he added.
Culture Secretary Oliver Dowden said: “These grants will help the places that have shaped our skylines for hundreds of years and that continue to define culture in our towns and cities.
“From St Paul’s and Ronnie Scott’s to The Lowry and Durham Cathedral, we’re protecting heritage and culture in every corner of the country to save jobs and ensure it can bounce back strongly.”