Aid to the Church in Need (ACN), which is part of the Vatican, has given the money to the Daughters of the Sacred Heart of Jesus in the capital Erbil.
The Daughters are providing aid, counselling and education to people who have fled from Islamic State in Iraq.
Islamic State destroyed its previous convent in Mosul when it captured the city last year, and has also forced the Daughters to leave two other convents in the Iraqi capital Baghdad.
ACN has said the Daughters require a newer, larger convent to accommodate the number of people they're serving.
In all, 100,000 Christians have fled to Kurdistan from Iraq because of the extremists, according to ACN.
The Archdiocese of Mosul has also received £69,000 from ACN, which will go to support 26 priests there.
In all, ACN has provided £5 million to support persecuted Christians in Iraq and others in the last eighteen months.
Neville Kyrke-Smith, National Director for Aid to the Church in Need UK, said: "I have met these Sisters whom we are helping - many of whom themselves are internal refugees.
"The love, prayers and witness of the Sisters and priests who had to flee and now live and serve their people, living amongst them, is a real inspiration."
"Please join us in daily prayers for those who have suffered.
"So many of them still face danger as they care for Christians, Yazidis and Muslims who are in need."