The £15.6 million grant, from the Olympic Lottery Distributor, will fund six of London 2012’s major Cultural projects.

They include an International Shakespeare Festival, a UK-wide film project for young people, and plans for World River, a spectacular Music Festival in London just before the 2012 Games.

Hall has been appointed by London 2012 to its Board of directors and will chair a new Cultural Olympiad Board, a joint initiative of London 2012, the Government and the Mayor of London, as part of a new structure to oversee the programme.

He will also report to the Olympic Board, which is made up of the four main stakeholders - London 2012, the Government, the British Olympic Association and the London Mayor - involved in the Games, and provide them with quarterly updates on progress.

Sebastian Coe, the chairman of London 2012, said: “We launched the London 2012 Cultural Olympiad last year, and have had great support from the cultural sector in the UK.

"This new investment means that all our major Cultural projects can now begin to plan for delivery with the vast majority of funding in place and we can move ahead to create exciting work which will enrich our Games, celebrating the UK’s cultural life and inspiring young people.

"It was our ambition that the Games would result in new investment to the UK’s creative industries so we are particularly grateful to the Olympic Lottery Distributor for helping to complete the architecture for the most wonderful cultural celebration for London 2012.”

Olympics Minister Tessa Jowell said: "The Cultural Olympiad is an ambitious project which has already caught the imagination of the cultural and creative industries across the country.

"The investment from the Olympic Lottery Distributor and the establishment of the new Cultural Olympiad Board under the leadership of Tony Hall will drive the project forward using their talent and expertise to create a world-class festival which gives everybody the chance to celebrate Britain 's rich culture."

Jude Kelly, the current chair of Culture, Ceremonies and Education at London 2012, will be a founder member of the new Board and help drive Baron Pierre de Coubertin’s vision of a united sport and cultural festival internationally, with a particular focus on developing the Cultural Olympiad legacy with the next Host City.

There are four candidates, Chicago, Madrid, Rio de Janeiro and Tokyo, with a decision due to be announced by the International Olympic Committee (IOC) at its Session in Copenhagen on October 2.

Hall, a 58-year-old from Birkenhead, was a former senior executive at the BBC before joining the Royal Opera House as chief executive in 2001.

Coe said: “Tony’s appointment to the Board reflects the importance of Cultural Olympiad to us and we welcome him aboard.

"The programme is delivered not by us, but in partnership and the creation of this new board will ensure that the vision we had during the bid will be delivered over the next three years – through those partnerships.

"We are hugely grateful to Jude Kelly for her fantastic contribution thus far.

"Her vision and energy throughout the bid and beyond, has ensured that culture is a core part of London 2012’s offering and legacy."

Hall said: I have always believed that the Olympic and Paralympic Games presents a fantastic opportunity for the arts in this country.

"We have the ability to introduce a whole new generation to arts and culture and show the world what a creative and inspirational country this is. I am looking forward to working with the [London 2012] Board, the Government and Mayor’s Office and Bill Morris’s team at LOCOG to create something really exciting”

Kelly said: “I’m thrilled with this new funding for the Cultural Olympiad.

"This is a realisation of our long held ambition for 2012, working with the International Olympic Committee, to successfully enshrine the cultural mission in the heart of the Games, to make it accessible to everyone and to hand that legacy on to other cities and future generations."

Janet Paraskeva, the chair of the Olympic Lottery Distributor said: “Our aspiration is for London 2012 to be not just a festival of world class sport, but also a celebration of art and culture which will involve all of the United Kingdom and its diverse communities.

"This major National Lottery grant of £15.6 million will help turn ambitious and exciting plans for the Cultural Olympiad into reality.

"Inevitably sport takes centre stage at the Olympic and Paralympic Games but London 2012 has the opportunity to put culture at the heart of our Games and to truly involve the whole nation whether they are people who love sport, music, theatre, heritage or film, whether they are able bodied or disabled. 

"We are particularly glad to be supporting the Cultural Olympiad because it will reach out across the UK and of course it is people all over the UK whose Lottery tickets are playing a major role in funding the Games.

"The Olympic Lottery Distributor is now the biggest single funder of the Cultural Olympiad and we believe that over the next three years London 2012 can bring art and culture to the centre of the Games like no Olympics before.”

Ben Bradshaw, Secretary of State for Culture, Media and Sport said: "We want our Cultural Olympiad to be the best the world has ever seen, inspiring and engaging people up and down the country.

"It's great that Tony Hall has come on board, bringing such a wealth of experience in broadcasting, production and the arts, and I very much welcome today's announcement of the funding boost from the Olympic Lottery Distributor."

London Mayor, Boris Johnson said: “The 2012 Olympic and Paralympic Games are a once in a generation opportunity to stimulate the extraordinarily fertile creativity there is in London and throughout the UK.

"This funding is a tremendous boost for the Cultural Olympiad, which will be an exciting shop window for our creative talent and for the cultural sector as a whole.

"A strong team will help ensure this happens, so I'm delighted that Tony Hall, with his energy and his ideas, has agreed to come on board.”