Mr Givan previously said up to £400m would be needed to fully fund a new early learning and childcare strategy for Northern Ireland.
The executive set aside £25m for childcare in the budget – about 6% of the estimated need.
Mr Givan said this latest investment shows the executive remains committed to making support for young children and their families a top priority, despite “an extremely challenging budget position”.
Melted Parents NI said it was “celebrating this big win” but that it understands “this won’t solve everyone’s problems and is limited to those in the tax-free childcare system”.
“This is an interim measure and most importantly, a start.”
Employers for Childcare welcomed the scheme as “a key first step towards a long-term Early Learning and Childcare Strategy”.
Its chief executive Marie Marin said the announcement is “a much needed tangible action to help tackle the affordability crisis which is facing families and the childcare sector”.
Parents in England are now entitled to free childcare hours from when their child is nine months old, but critics of that scheme have said there are not enough childcare places.
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