This new money is being targeted at grassroots community club rugby as well as into school and college rugby all across Wales. It will also help enhance the facilities in the Millennium Stadium, a key driver of WRU revenue, as well as rugby club facilities throughout the nation.
All of this funding is in addition to the significant budgeted activity already planned across the game in Wales by the WRU in its five-year rolling business plan.
This extra multi-million pound investment into rugby in Wales has been made possible by the WRU's very strong financial performance over the past year.
WRU Group Chief Executive Roger Lewis said: "Our focus with this new funding is firmly targeted at the foundations and the future of rugby in Wales; grass root clubs, as well as schools and colleges.
"This programme of major investment into the game is intent upon creating and maintaining a modern and attractive sport capable of encouraging more people to get involved in rugby at all levels across our nation. It is targeted at the heart of our sport.
"We want to attract and retain players of all ages, as well as coaches, match officials, volunteers and supporters. This fresh funding will ensure that the game can continue to move forward in the face of competition from an array of other sports and activities. We also want make certain that our facilities in our clubs and in our Millennium Stadium are in the best condition possible.
"We are able to immediately release such significant amounts of new money into rugby projects across Wales due to our powerful financial performance this year.
"We have maintained our strong financial position in the face of unprecedented economic conditions. We have done so through very careful planning, regular and stringent reviews and outstanding team work across all of the WRU. It is incumbent upon us to share these benefits with the whole of Welsh rugby.
"We have thought long and hard about what areas we must prioritise and the extra spending we are announcing today is based upon the results of that review.
"This represents a very responsible investment by the WRU, in that all the projects will significantly improve rugby both on and off the field in real and tangible ways for years to come."
One of the key spends will see £500,000 delivered directly to the community game across Wales in a facilities grant which will encourage clubs to improve their infrastructures.
Details of how clubs can apply for and obtain various levels of grant income of up to £50,000 each will be announced shortly by the WRU.
On the field of play an array of funding packages are to be delivered into the schools system for teacher courses, and player skills curriculums.
A parallel series of investments will go towards a new Freshers League and other tournaments associated to college rugby.
Over £200,000 will go directly into developing schools and college rugby.
The new investment has been heralded by the WRU as a signal that the Union is determined to fulfil its remit of sustaining and developing rugby as the national sport of Wales.
Another major area of investment will be in a programme to refurbish and modernise the 122 hospitality boxes on level 5 of the Millennium Stadium so as to ensure it retains its status as one of the world's great sporting and entertainment venues.
Within the stadium rugby memorabilia gathered down the decades from all over the world will be placed on show at various points accessible to supporters and people on formal guided tours to enhance the visitor experience..
In another aligned project the archive broadcast footage of Wales international rugby matches is to be digitised to preserve the history of the Welsh game for future supporters to enjoy.
The WRU has recently bucked economic trends and in the past six years has increased its turnover by around 24 per cent and its distribution of funding into the game across the same period by 30 per cent. The WRU has outperformed all other rugby unions in the world by achieving a compound annual growth rate of 13.4% over a five year period.
The outstanding debt on the Millennium Stadium has also been reduced from an initial £70 million pounds to a current and record low of just over £26 million with the possibility of the WRU becoming debt free by 2021.
In recent years the WRU has also unveiled the multi-million pound National Centre of Excellence at the Vale Resort which boasts indoor and outdoor state-of-the-art training facilities. It is the home of 16's, 18's, 20's, 7's, Women's and the national squad.
The WRU now operates to a five year rolling Financial and Strategic Plan which identifies income and spending projections and governs the running of the union managed by the WRU Executive Board, under GCEO, Roger Lewis.
This additional investment of £3.5 million on new projects has been secured within the WRU's current income levels projected and secured within the terms of the strategic plan.
Other priorities within the spend will include an Anti Doping Awareness Campaign, a boost for the Exiles structure, and a new sponsorship vehicle to take marketing and awareness messaging around Wales.
The WRU and the four Welsh Regions are in detailed discussions as a result of the PwC review into the financial position of regional rugby which begun in December 2011. The WRU already has committed to a potential £80m distribution to the four regions over a 5 year period in the Participation Agreement signed in 2009: over £30m in cash from the WRU for player release, over £45m from the major competitions in which the regions compete and over £3m of direct funding from the WRU into the regional academies.
Mr Roger Lewis added: "Our talks with the four regions are very positive. I am confident that we can arrive at an agreed way forward very soon. At the heart of the solution will be a much closer working business and rugby relationship between the WRU and the four regions. Working together for the benefit of all of Welsh rugby has to be the answer."