The EPA has awarded $1.3 million in grants to the city.
Most of the money will be used as loans to developers to help clean up hazardous materials from downtown-area buildings.
"We're very excited about this and the opportunities that it gives to developers in our community," said Craig Lindholm, executive director of community redevelopment and grants.
Another portion is aimed at cleaning up two spaces owned by the city that have sat vacant for decades.
This is the first time Texarkana, Texas has received the "revolving loan fund" grant.
The money could be put to use in the next few months.