Nigerian President Muhammadu Buhari has approved the equivalent of $17m (£12m) for the construction of 38 oxygen plants across the country.
The West African country is grappling with a shortage of oxygen for Covid-19 patients amidst a second wave of the pandemic.
The number of Covid-19 patients in need of oxygen support is unclear, but the authorities have said that the situation was critical.
In a statement, the government said it had earmarked an additional $671,000 for repairing existing oxygen generation facilities in five hospitals.
Finance Minister Zainab Ahmed told a meeting of the National Economic Council that the construction of the new plants was necessitated by an increase in the number of patients in need oxygen.
It is not clear when the new oxygen plants will be completed.
On Thursday, Nigeria recorded 1,964 infections - its highest number of new daily cases so far.
In total the country has recorded 116,655 cases since the pandemic started, including more than 93,000 recoveries and 1,485 deaths.