The money is coming from the governments First World War Centenary Cathedral Repairs Fund.
£535,000 will be used for repairs to heating, wiring and lighting.
The Church of England was given £4.7 million by the Chancellor George Osborne as part of a package of funding announced in his budget.
Dean of Derby, The Very Revd Dr. John Davies said: "Derby Cathedral has drawn up plans for active commemoration of the First World War.
"We are extremely grateful that this money has been given to allow the important and pressing repairs to the heating, wiring and lighting, which in turn will enhance the setting for the commemorative events planned over the next four years.
"There has been a church on the site of Derby Cathedral since 943AD; the building has always been and remains an icon of Derby, standing as a living reminder of Derby's history and a very active part of its present and future.
"This money will transform the Cathedral and what it can offer to the city, county and its various communities".
Chairman of the Cathedrals Fabric Commission for England, Rt Hon Frank Field MP, said: "Through this move the Government has offered taxpayers the most public and tangible way they can remember the sacrifices of the dead and wounded in the Great War.
"English cathedrals embody much of the image of England the men and women took to the front, and for which they risked their lives".