EPA said the grants -- nearly 60 percent of which will go to New York, and about 40 percent to New Jersey -- will help combat risks of flood damage and boost wastewater and drinking water facilities to withstand the effects of severe storms like Sandy.
"This funding will help vulnerable communities in New Jersey and New York become more resilient to the effects of climate change," EPA Regional Administrator Judith A. Enck said in a statement.
The announcement Thursday follows the release of a report by Climate Central, which has headquarters in Princeton, N.J., that said Hurricane Sandy caused more than 10.9 billion gallons of sewage overflows, 32 percent of which was untreated sewage.
Most of the sewage -- resulting from damage to a number of treatment plants -- flowed into the waters of New York City and northern New Jersey in the weeks after the storm.
To illustrate the amount of sewage, the report authors likened it to the area of New York City's Central Park -- 1.4 square miles -- piled 41 feet high with the substance.
Sewage treatment plants are particularly vulnerable to storm surges and coastal flooding because they are usually near water in low-lying areas.
The analysis attributed 94 percent of the spilled sewage to damage caused by coastal flooding. Other cases, the report said, occurred because the storm surge flooded treatment plants and pumping stations, or a combination of power outages and flood conditions which shuttered facilities or caused major diversions of sewage into receiving waters.
"Our research reveals another yet danger we will face as climate change drives sea levels higher," report author Alyson Kenward said in a statement. "Our sewage infrastructure isn't built to withstand such surges and we are putting our property, safety and lives at risk if we don't adequately plan for these challenges."
New York and New Jersey authorities estimated it will cost $3 billion to repair flood-damaged facilities, Climate Central reported.
The Union of Concerned Scientists, in a statement in response to the EPA funding announcement, called for more aggressive measures against similar events, citing growing threats of climate change.
"Handing out grants on a piecemeal approach is not the long-term answer," said Angela Anderson, director of the group's Climate and Energy Program.
"The federal government needs a nationwide plan to provide funds to all coastal communities, not just the ones hit hard by Sandy, to adapt to the changes global warming is bringing."