The scheme will be rolled out across England if it is successful. Dyslexia charities are also being given grants.
Schools Secretary Ed Balls said a lack of understanding had previously branded intelligent young people as backward.
"In the past a grave lack of understanding about dyslexia left some highly intelligent young people branded as 'backwards' simply because they had some difficulties in reading or articulating themselves through writing," he said.
"Those days are largely gone, but there are still some old stigmas around and still not enough widespread understanding of dyslexia and support for the individuals who experience it.
"This condition should not hinder young people's education and life chances. Sadly, it all too often does. We need to be better at identifying pupils with dyslexia and then supporting them."
The measures being announced would give parents and teachers more information, would help to identify pupils with dyslexia and assess the impact of support from specialist teachers, he said.
[I have a special interest in this because I'm dyslexic - Ed]
