The aid includes more than $390 million in foreign assistance. The rest of the fund will help with Colombia's humanitarian efforts and counter-narcotics programs, the White House said in a statement.
The announcement came as Colombian President Juan Manuel Santos visited the White House on Thursday. A peace deal is in sight between the Colombian government and the Revolutionary Armed Forces of Colombia rebel group (FARC) after five decades of armed conflict, Xinhua news agency reported.
"After half a century of wrenching conflict, the time has come for peace," Obama said at a White House reception for Santos. "A country that was on the brink of collapse is now on the brink of peace."
"Today's Colombia is much, much different from the Colombia of 15 years ago," Santos said, "Today, we see the future with hope."
Violence in Colombia is at its lowest level since 1973. The country has also seen a 50-percent drop in homicides and a 90-percent decline in kidnappings since 2002, according to the White House statement.
The Colombian government has held several rounds of peace talks with FARC since November 2012. So far, the two sides have agreed on land and rural development, political participation for former rebels, fights against drug trafficking, and reparations for victims of the conflict.
They hope to reach a final accord by March 23 to end their long-running conflict, which has killed more than 220,000 people, most of them civilians, and forcibly displaced some 6 million, according to the White House.
The US has provided Colombia with nearly $10 billion in aid since 2000 through the Plan Colombia program, aimed at combating drug cartels and leftwing insurgent groups in Colombia.