The firm makes savoury and sweet pastries and has been made famous through its TV adverts by Donaghmore singer and presenter Malachi Cush.
The money is coming from the Department of Trade, Enterprise and Industry and will be used to upgrade equipment.
Managing director Grainne Hampton said the investment would help with long-term growth.
“Our position as one of the leading savoury and sweet pastry manufacturers in the UK and Ireland will be strengthened by this,” she said.
“The installation of cutting edge technology and production processes such as fully automated cook, cool and chill production lines will increase our capabilities as well as our capacity.”