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Los Angeles Police Department Chief Charlie Beck said the reward, raised in part from private donations, police unions and contributions from businesses, marks the biggest sum ever offered in Southern California in a criminal investigation.
The reward was posted as law enforcement agencies across the region pressed their search for the suspect, ex-LAPD officer and U.S. Navy reservist Christopher Dorner, 33, for a fourth day. Beck described it as the largest manhunt ever mounted in the Los Angeles area.
He called the spate of revenge-driven killings Dorner is suspected of unleashing "an act of domestic terrorism," adding, "This is a man who has targeted those who we entrust to protect the public. His actions cannot go unanswered."
An LAPD spokesman also said that police would be providing extra security for the recording industry's Grammy Awards ceremony being held on Sunday at the Staples Center in downtown Los Angles.
The search for Dorner has been focused in the snow-covered San Bernardino Mountains east of Los Angeles since a pickup truck belonging to Dorner was found abandoned and burning near the popular ski resort community of Big Bear Lake on Thursday.
The truck turned up in the mountains hours after police say Dorner exchanged gunfire with two officers, grazing one, and later ambushed two more policemen in their patrol car at a stoplight, killing one and badly wounding the other.
A rambling, multi-page manifesto posted on Dorner's Facebook page last week claimed he was wrongly terminated from the LAPD in September 2008 and threatened numerous police officers and their families with violent revenge.
A former Navy lieutenant, Dorner also is suspected in last weekend's shooting deaths of a campus security officer and his fiance, the daughter of a retired Los Angeles police captain singled out for blame in the manifesto for Dorner's dismissal.
The retired LAPD captain had represented Dorner in disciplinary proceedings that led to his termination after a police inquiry found that he had made false statements accusing a superior officer of using excessive force against a homeless person.
Beck announced on Saturday a reopening of the inquiry to "reassure the public that their police department is transparent and fair."
The police officer who was shot to death in an ambush on Thursday was publicly identified on Sunday as Michael Crain, 34, a U.S. Marine Corps veteran who served on the Riverside Police Department for 11 years.
LAPD spokesman Andrew Smith said "an army" of police officers would be providing security for a public memorial service planned on Wednesday for Crain.
In addition to continuing a manhunt in and around Big Bear Lake on Sunday, police were searching areas around the homes of more than 50 Los Angeles police officers whose families authorities believe Dorner has targeted as potential victims.