Austin, which is the third city to participate, was selected over two dozen contenders across the U.S., officials said.
"Austin stood out due to its existing city-wide digital inclusion plan, active developer community and growing informal education landscape," said Mark Surman, Mozilla's executive director. "When you couple lightning-fast Internet with innovative projects in the realms of education and workforce development, amazing things can happen."
The funding will likely back 10 to 20 Austin projects over the next few years.
In addition, Mozilla is creating Gigabit Hive Austin, a network of individuals, schools, nonprofits, museums and other local organizations interested in teaching and learning new Web technologies. Hive Austin will be one of 14 Mozilla Hive network and communities across four continents that teach Web literacy and new technology skills.
The Mozilla Gigabit Community Gigabit fund is a joint initiative between Mozilla, the National Science Foundation and US Ignite.
Mozilla will open the first round of grant applications in Austin in August, and accept applications through Oct. 18. Applicants and projects don't have to be from Austin originally, but must be launched locally.
For more information on the application process, go here.