Sports Minister Hassan Wario gave the orders after boxers and athletes, including Olympic 800m Champion David Rudisha and 800m World Champion Eunice Sum, had voiced their concern that they were being ferried out to Glasgow, Scotland, without their allowances, reports Xinhua.
The first batch of Kenyan sportsmen to the Games left Nairobi Sunday.
"There is no cause for alarm. We have paid the allowances and the team is training well. Those that have left for Glasgow will have their share taken to them. But those in camp have been given their money," said Commissioner of Sports Gordon Oluoch.
The Commonwealth Games are from July 23-Aug 3. Kenya is entering a squad of 195, their biggest ever, in 15 disciplines.
During the last Games in Delhi, India in 2010, Kenya finished sixth behind Australia, India, England, New Zealand and South Africa with 22 medals, including 11 gold, 10 silver and nine bronze medals.
They got a gold in swimming, a bronze in boxing while track and field accounted for the rest of the medals.
"The decision by the government to pay the athletes is a relief to us. The pressure is off our shoulders. We can now concentrate well and maintain our focus on a good show in Glasgow. All will be well with the athletes, who were worried," said Pius Ochieng, the overall Team Kenya General Manager.
On Tuesday, officials of Ministry of Sports disbursed the money to Sports Stadia Management Board (SSMB) to be released to the 195 athletes heading to the Club Games.
"The athletes that are leaving today were reluctant to depart. But we have gone the extra mile to pay them," said Oluoch.
Boxing and some elite track and field athletes had threatened not to board the plane to Amsterdam on transit to Glasgow if they were not paid their money.
The elite athletes complained that the normal government bonus of winning medals in Moscow, Russia back in 2013 had not been settled till date.
"We won medals in Moscow, during the 2013 World Championships in Athletics. But till date, we have not been paid by the government. How can we be certain that we will be paid this time round our bonus and training allowances," said an athlete who did not want to be named.
Each person in the 195 member team is entitled to $250 per day for the duration of the games pegged at 24 days.
The National Olympic committee of Kenya who are in charge of the team preparations had already given out the $300 for the athletes' upkeep while in residential camp in Nairobi.
Africa Javelin Champion Julius Yego, who is Kenya's athletics team captain, said they were compiling the lists for payment.
"All is well for now since we have been assured that the payment is being processed," said Yego.
"We have already submitted the list of names of the athletes. The athletes wanted the allowances remitted in cash," he added.