The money, to be spread over three years, will be distributed to secondary schools and associated primaries which will have to bid for the cash.
Grants for groups of schools will range from pound;500 to pound;2,500.
The intention is that primary teachers will be given an awareness of science teaching in secondary schools.
Mr Wallace, announcing the initiative at the annual Science and the Parliament event in Edinburgh on Wednesday, said: "This new grant scheme will help pupils make the transition from primary to secondary school science. This can be a particularly challenging time for some young people where they may lose interest in science and today's funding should help tackle this."
Ministers have been anxious to press home the advantages of science, from school into university, not least for economic reasons as they seek to make commercial capital out of the scientific and research expertise in higher education. There has been mounting concern at the falling take-up of science subjects in school and the impact on the university courses.
The Scottish Executive has poured pound;18 million into school science as a result, which is intended to be spent by 2006.
Peter Peacock, Education Minister, underlined the point about the importance of science for Scotland's economic future. "It is therefore essential that we continue to look at new schemes, such as this, which will help equip our young people for work or further study in this sector."
Mr Wallace also stressed the need for a better understanding among the public at large as well as young people of controversial issues such as genetically modified crops, energy, pollution and waste management. "We need to improve public debate on the issue of risk so that policy can be developed in a balanced, informed and objective way," he said.
Willie Rennie, Scottish parliamentary affairs officer for the Royal Society of Chemistry, welcomed the cash as "a step in the right direction". While it was "symbolic of the Executive's support for science education, there remains a wide gap between what ministers have provided and what is required", he said.
The Executive allocated two sums of pound;5 million and pound;3 million for science equipment last year. But, Mr Rennie pointed out, this was "spread thinly" across primary and secondary schools in all authorities and in all the sciences - and the money was also intended to cover training.