The private Ford Foundation said on Friday it had committed $2.2 million to study environmental hazards related to dioxin in Agent Orange, a defoliant used by the US military during the Vietnam war.
The foundation also announced plans to bring health services to Vietnamese people living with long-term disabilities caused by the defoliant.
"Grants will support research to help identify dioxin 'hot spots,' pilot projects to develop new clean-up technologies, and survey research and public health programmes," the group said in a statement.
US forces widely sprayed Agent Orange in southern Vietnam during the conflict to deprive enemy guerrillas of forest cover and destroy food crops.
Vietnam says millions of people have suffered a range of illnesses and birth defects as a result of exposure to Agent Orange.
Many war veterans from the United States, Australia, New Zealand, Canada and South Korea have also reported illnesses caused by the chemical.
"In Vietnam there is a real desire to make progress on these issues among everyone concerned," said Charles Bailey, head of the Ford Foundation in Hanoi.
In a separate development, the Vietnam Veterans of America Foundation (VVAF) signed an agreement with Vietnam's defence ministry on Friday to extend a US government funded survey of unexploded ordnance and landmines.
According to Vietnamese data 350,000 to 850,000 tons of bombs, artillery shells, mortars and rockets are scattered across the country, said VVAF.
Tom Leckinger, a VVAF representative, said cooperation between the US and Vietnam "to clear the land of these deadly legacies of the war sends a very powerful message of peace, friendship and reconciliation between our nations."