Circles of Support and Accountability (Cosa) is run across the six north Wales counties by charity Cais and the probation service, with 100 volunteers.
Offenders go through a rigorous risk assessment before they can sign up.
The money is coming from the North Wales police and crime commissioner.
Cais chief executive Clive Wolfendale said upon release from prison sex offenders were often relocated - making it more likely for them to reoffend.
"With no social connections or bedrock to make a go of life the prospect of them re-offending becomes more likely and presents a very real danger to society," he added.
"Cosa addresses that in a practical, direct way, putting the individual together with a team of volunteers to support them through rehabilitation techniques.
"The aim is to steer them towards a more meaningful, crime-free contribution to society and eventually productive employment."
The Cosa approach was launched in Canada and first trialled in the UK 15 years ago by Thames Valley Probation Area which achieved a 75% drop in re-offending.
A scheme where volunteers work with sex offenders to stop them reoffending has received a £30,000 funding boost after achieving a 100% success rate since it was launched in 2007.