The US$36m fund will be used by the Food and Agriculture Organisation to provide immediate assistance to over 630,000 poor and food-insecure people in Yemen.
Its aim is also to increase longer-term agricultural resilience in the conflict-ridden country.
The funding for the three-year project will come from the World Bank's Global Agriculture Food Security Programme.
The FAO said that fighting since civil war broke out in 2015 has had a devastating impact on the food security, nutrition and livelihood of Yemenis.
The UN agency will use the grant to support priority projects, such as those providing food-security support and rehabilitation of water resources to increase smallholder production.
It will target 21 of the most food-insecure districts in the country, where landless farmers with no or few livestock, sharecroppers, smallholder famers and households headed by women will receive special focus.
"The project will have a strong humanitarian impact in Yemen as it will provide emergency support and help in building the resilience of the vulnerable Yemeni population," said Abdessalam Ould Ahmed, the FAO’s regional representative.
"Since agriculture is one of the most important economic sectors in Yemen, reviving agricultural activities will increase people's access to food as well as income-generating activities, which means greater food security."
The project will also go beyond immediate humanitarian assistance by restoring the capacity of Yemeni farmers who have lost their livelihoods due to the conflict in years to come, Ould Ahmed added.
Salah El-Hajj Hassan, the FAO's representative in Yemen, added: ”The grant will go a long way in helping us provide sustainable agricultural solutions—furthering rural development, providing food security, rehabilitating community water infrastructures and improving capacity development in a country where millions of people are food insecure.
"Given the ongoing hostilities in Yemen, this project could also contribute to bringing stability to the country."