The B6357 Jedburgh-to-Newcastleton road will be improved between Ralton Bridge and Riccarton and within the village itself at North Hermitage Street.
The A701 between Tweedsmuir and Tweedshopefoot is also in line for surface improvements and traffic-calming measures or widening where appropriate.
The industry is included under phase one of the Scottish Government’s Covid-19 recovery routemap, meaning forestry works can currently operate fully.
Fergus Ewing, Holyrood’s cabinet secretary for economy and tourism, said: “Forestry is an important part of the rural sector, generating £1bn for the economy each year and supporting 25,000 jobs.
“Throughout the Covid-19 recovery, forestry has a very important role to play.
“We need to ensure that the infrastructure is there to support the industry on a number of fronts, and assisting with getting timber to market is one of them.
“Getting these important timber supplies out relies on a good transport network, and this funding will help ensure this is in place to allow a long-term sustainable forest industry.”
The cash handout, to be paid to Scottish Borders Council, is co-financed and drawn from the strategic timber transport fund managed by Scottish Forestry.
Timber is being used to produce key products such as pallets and packaging needed to transport food and pharmacueticals.
Stuart Goodall, chief executive of CONFOR, added: “This is a fantastic boost for Scotland’s forestry sector as we seek to recover from the harsh impacts of COVID-19.
“This investment not only provides vital support to help the sector continue to grow, it provides a real confidence boost at a difficult time.”