The extra money supplements the Pounds 2m announced in February for the Union Learning Fund which supports trade union projects.
Mr Blunkett unveiled 45 successful bids for funding at the TUC Congress in Blackpool.
He said the cash would give unions "real influence in workplaces in encouraging employees and employers to rise to the skills challenge.
"For the UK to be truly competitive, we need trade unions to be at the heart of development activity such as this. They are uniquely placed to influence learning in the workplace."
The successful projects will include developing learning centres, schemes to help the unemployed into work and careers guidance.
Projects include a Banking Insurance and Finance Union scheme to target staff who have had little or no post-school education or training, to teach them computer skills and cover key communication and number skills; a joint scheme between BIFU and the shopworkers' union USDAW to promote workplace learning for dyslexics and creating a virtual learning centre for mobile workers.
Each project has a ceiling of Pounds 50,000 and the first phase will run from this month to March next year. They will link with other initiatives such as Individual Learning Accounts, the University for Industry and Investors in People.
John Monks, the TUC general secretary, said: "These awards recognise the important contribution that trade unions are already making to boosting skills. Our message to members is clear - learn to earn."