In the second round of a funding program aimed at supporting communities affected by drought, the streetscape recovery project will receive funding.

The revitalisation of Rouse Street and High Street will see the restoration of facades, heritage colour schemes and other restoration works, to make Tenterfield a more immersive cultural tourism experience using its architectural assets and important historic artefacts.

"The revitalisation of the Tenterfield CBD will have a huge impact on our economy," mayor Peter Petty said.

"Encouraging visitors to Tenterfield means they can then be enticed to visit our villages and rich historic sites and will ensure that our valuable heritage is not lost and can be celebrated by all."

Meanwhile, the government is also spending money at Drake, as well as new signage across the shire, and funding to restore the historic Wilsons Downfall Cemetery.

Upgrades to the Drake Village Resource Centre include repairs to the building and toilet facilities, installation of rainwater tanks, painting, upgrades to existing solar systems, construction of an emergency response shed and improvements to gardens and signage.

"For the community of Drake who suffered immense hardships during the fire events of 2019 and 2020, the upgrade of facilities in their village will be very welcome in providing the infrastructure to ensure they are able to deal with any similar events," Cr Petty said.

At Wilsons Downfall Cemetery, north of Tenterfield, the funding will be spent on clearing invasive vegetation from existing grave sites, identifying pre-existing grave sites, maintenance of existing headstones, and the installation of interpretive and directional signage.

Federal Member for New England, Barnaby Joyce, said the Drought Communities Program was helping to keep local economies going even through the tough times caused by the drought.

"This program is so important to the people of Tenterfield because it helps keep people in work, the cash-flow going around town and ensures that local businesses can continue operating," Mr Joyce said.

"It builds on more than $3 million in Australian Government funding already delivered for the Tenterfield Shire under previous rounds of the Drought Communities Program, bushfire support and infrastructure-building initiatives designed to support local economies struggling under the effects of COVID-19."

Minister for Agriculture, Drought and Emergency Management David Littleproud MP said the program would create jobs for people struggling to find work because of drought.

"Make no mistake, we're standing shoulder-to-shoulder with drought-hit communities in the New England," Minister Littleproud said.

"We've committed more than $10 billion to drought and that includes investments to make our communities resilient and better prepared for the next drought.

"The $2 million we're spending in Tenterfield under the Drought Communities Program will help the local economy to recover from the effects of the drought, fires and now the COVID restrictions.