New York Gov. Andrew Cuomo announced the plan Friday. He says it will "dramatically improve" the power grid on Long Island. It suffered widespread and sometimes weeks-long outages after the October 2012 storm.
The work will include raising substations to avoid flooding, improving the switching system to minimize outages and burying some power lines.
Most of the money comes from the Federal Emergency Management Agency and some from other Sandy recovery funds.
PSEG of New Jersey took over running the Long Island Power Authority's grid in January. Spokesman Jeffrey Weir says PSEG is very excited about the funding and working on details of putting it to use.