The funding will be used over two years to enhance pupil-directed learning and lift engagement.
Departing St Clair School principal Richard Newton was a driving force behind securing the funding and said he was "delighted'' the proposal had been accepted by the Ministry of Education.
"It's a fantastic project.
"I think it's going to be something that enhances the learning of the children in the school,'' Mr Newton said.
The two schools were part of only 46 projects around the country that received funding in what was the second round of innovative teaching projects grants from the ministry's Teacher-Led Innovation Fund.
Mr Newton said the two schools put a lot of time into their proposal, which would benefit both the children and teachers.
The two schools had collaborated on a range of projects for the past eight years.
East Taieri School principal Jennifer Horgan said the project, run over two years, would be led by teacher Janine Clague and involved professional development for teachers and use of technology to help pupils take greater ownership of, and have a voice in, their own learning.
Milton Primary School received a grant of $49,000 to put towards raising literacy achievement, the only other Otago school to receive funding.
Clutha-Southland MP Todd Barclay said in a statement he was "looking forward to seeing the results'' of the Milton school project.
Education Minister Hekia Parata announced the $3.6 million funding in a statement yesterday.
"We want to support teachers' bright ideas that evidence shows are working and can be scaled across the education system.
"It's all part of our focus on how we make excellent practice become common practice,'' she said.
Mr Newton announced he was stepping down as principal of St Clair School on September 23.