Panama's national government will transfer US$183mn in property tax revenue collected from Colón province's district of the same name to provincial capital Colón.
Some US$33mn of the funds will be used to carry out various infrastructure development projects in the city, the economy and finance ministry (MEF) said in a release.
MEF's regional planning division, the comptroller general and officials from the mayor's office have formed a taskforce to define the best use of the funding.
Projects under consideration include a beltway surrounding the city, the renovation of parks, construction of a public market and modernization of municipal buildings.
The housing ministry will use US$150mn of the funding for construction of new homes in the city.