Historic Scotland has pledged £500,000 towards the scheme which also has council and private sector support.
The project is due to get under way in April and finish in 2021.
It will include the refurbishment, improvement and reuse of historic buildings in the town centre.
They include Stranraer Museum, the former Harbourmaster's Office and Gillespie's Bakery.
Grants will also be available to property owners to allow them to undertake essential external repairs to their premises and contribute to the wider improvement of property condition across the town.
Dumfries and Galloway Council said the cash injection would ensure major improvements and restoration of some of the most historic parts of the town.
The final element of a £1.7m investment package has been secured to finance a regeneration programme for conservation areas within Stranraer.