Individuals will be eligible for up to $15,600, the equivalent of $300 per week for last year, as part of a $2.1bn fund negotiated as part of the $212bn state budget.
Immigrant communities in New York City were some of the hardest hit when the coronavirus began to sweep through the city in March and April of 2020.
Thousands died, and industries on which many relied for employment – the service sector and construction – ground to a standstill.
No documentation means no unemployment insurance and no federal stimulus checks, leaving many reliant on charitable organisations, food pantries, loans from friends, and rent concessions or forgiveness from landlords.
Eligible workers will need to verify that they were state residents, lost income as result of the pandemic, and were not able to access federal unemployment benefits. Those who can only prove residency, and provide some documentation relating to work, could be eligible for up to $3,200.
It is unclear exactly how many undocumented families live in New York, but on Wednesday the Fiscal Policy Institute said that it believed the fund could benefit as many as 290,000 across the state, The New York Times reports.
Negotiating the fund became one of the most contentious parts of finalising the state budget – negotiations went on beyond the deadline of 1 April – and is seen as a win for progressive Democrats and their policy priorities.
Republicans were quick to criticise the move when so many other New Yorkers are also struggling from the economic downturn sparked by the pandemic.
Moderate Democrats from swing districts upstate and on Long Island fear that giving taxpayer money to people who are not in the US legally will be used against them in the next electoral cycle.
Nevertheless, with Democrats in control of both the State Senate and State Assembly, the measure was adopted with supporters citing a moral imperative.
Progressives spent months lobbying for the cause, and their message was backed up by protests in New York City to draw attention to the plight of undocumented workers.
The New York fund far exceeds a similar $75m measure in California, which provided $500 to undocumented workers on a first-come, first-served basis.
As of 8 April there have been 1.92 million confirmed cases of Covid-19 in the state, 871,000 of which were in New York City. A total of 50,332 New Yorkers are officially recorded as having died from the virus, 31,598 in the five boroughs of the city.