The Minister announced the funding while on a visit to Newbridge to see improvements already made with backing from Welsh Government and EU Funds.
Part of Caerphilly Council’s wider regeneration plans for the area, the funding will build on previous regeneration phases which included the development of Calzaghe Bridge as well as the renovation of the Newbridge Memorial Hall and Institute.
The additional funding will allow further physical improvements to get underway, and regeneration of derelict land for economic and community use.
In Bargoed, the funding will support the development of a new site for business as well as an urban park. A commercial improvement funding scheme will be available for local businesses in both towns to enhance the frontages of their premises.
Announcing the funding Finance Minister Jane Hutt said:
"I am delighted to announce extra EU Funds to continue the regeneration of Newbridge and Bargoed.
"The funding will help build on progress already made in creating an attractive environment to ensure the success of both towns. It will also boost private sector investment and contribute towards the long term economic prosperity of the area. This is another example of how Wales benefits from EU Funds and membership of the EU."
Cllr. Ken James Cabinet Member for Planning & Sustainable Development, said:
"Over recent years we have seen some dramatic transformations of some of our key towns in the Caerphilly county borough. Working in partnership with Welsh Government, we are able to make a commitment to grow and enhance our existing town centres to create attractive, vibrant and prosperous places for residents and visitors to live, work and visit."
The Council will be consulting the public on these proposals over the coming months and all projects will be delivered by mid 2015.
EU projects have already created over 23,500 (gross) jobs and some 7,600 enterprises. In addition, 161,200 individuals have been supported to gain qualifications and some 53,900 have been helped into work.