Sheikh Dr Sultan bin Muhammad Al Qasimi, Ruler of Sharjah, ordered Dh6 million be allocated to stage the event, state news agency Wam reported on Thursday.
The festival is to take place in Al Dhaid Square during the 2022 to 2023 racing season.
Issa Al Hazami, chairman of Sharjah Sports Council, thanked the Ruler for his support and said it will further boost the sport in the emirate.
Mr Al Hazami said the council will now work with the Sharjah Camel Racing Club on the season's programme.
Camel racing is a cherished tradition in the UAE and has been a central part of life here for centuries.
The weekly races held during the winter months attract huge numbers of visitors.
Big financial prizes are also up for grabs.