The funding, included in a $52.8 million supplemental budget bill, would pay for response efforts, lab equipment, water sampling and other functions.
Fifteen new state employees would be hired to help.
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Rick Snyder a month ago signed an executive directive establishing a PFAS team to coordinate response efforts among local, state and federal agencies.
The legislation won approval from a Senate committee and both chambers in a matter of hours, on a 33-4 Senate vote and a 109-1 House vote.
The spending bill also includes a provision allowing a planned new state veterans home in Detroit to be located outside the city, which drew criticism from Democrats.
Michigan has two homes now, in Grand Rapids and Marquette, but plans to build a new one in the Detroit area and to replace and downsize the Grand Rapids facility.
A third of the state’s 640,000 veterans live in Wayne, Oakland and Macomb counties.
The bill includes $25 million for brownfield remediation and redevelopment, water asset management and drinking water monitoring.
The money would come from the $35 million Michigan Infrastructure Fund.