The Diamond area of Donegal Town is to be given a quarter million euro boost.
€100,000 is to go Bundoran.
The money, from Bord Failte, will be spent on improving outdoor spaces in both towns.
Donegal Fianna Fail Councillor Micheál Naughton says it will help the south Donegal area in promoting itself as a tourist destination.
Sinn Fein Councillor Michael McMahon says the €100,000 allocated for Bundoran is badly needed.