The Press Association (PA) news agency received £622,000 for its Reporters and Data and Robots (Radar) scheme.
Radar will benefit "established media outlets", independent publishers and local bloggers, PA said.
One expert said it was unlikely to replace traditional reporting, although the project, which launches in 2018, will also use human journalists.
Five people will use official open data sources to automate reports about health, crime, employment and other subjects.
"Skilled human journalists will still be vital in the process, but Radar allows us to harness artificial intelligence to scale up to a volume of local stories that would be impossible to provide manually," said PA editor Pete Clifton.
He added that the news media was in need of "cost-effective" ways to produce local stories.
It was an interesting move, suggested Neil Thurman at City, University of London and the University of Munich.
City has itself received £295,000 from Google's Digital News Initiative, though Dr Thurman is not involved in the project that will benefit from the funds.
"I find it difficult to see how automation is going to help provide additional coverage of local magistrates courts and crown courts," he told the BBC.
Rather than a surge in data alerts, local news consumers may be more interested in a boost to carefully curated news and analysis, he argued, pointing out that this remains the preserve of human journalists.
"You can't really cover [local government] through automation because it's a lot about investigation, politics, personal relationships, who has said what to whom and so forth - it's difficult to get that information in data feed form," he said.
Dr Thurman and colleagues recently published a study in which examples of automated journalism were evaluated by professional human reporters.
Many felt that the quality of the writing in the reports was below par, though some suggested automation could be useful for breaking certain factual news stories that could later be expanded by humans.
However, robot journalists have already been caught out by fictitious information.
Last month, an LA Times program published an alert about a magnitude 6.8 earthquake in California.
It was dated 29 June 2025 and in fact related to an earthquake that took place 100 years earlier - the notification had been published erroneously by the US Geological Survey.