The 2019 Open will be worth US$4.5 million, up from last year's prize fund of US$3.25 million, which makes it the second richest event in the women's game behind the US Women's Open.
The prize increase - which comes in AIG'S first year as title sponsor - brings the winner's cheque in the first week of August up to US$675,000.
Despite the increase, the Women's Open will still be worth well less than half of the upcoming US$10.75 million Open Championship at Royal Portrush.
R&A Chief Executive Martin Slumbers said the increase is part of a long-term effort to bring prize money for the Women's Open in line with that of the Open Championship.
“This is an important first step and we know it will take time to move closer to achieving parity with the men’s game," Slumbers said.
"We will continue to work toward the long-term goal of a sustainable business model but we can’t do it alone and the support of fans, sponsors and media are all key to achieving that success.”
Nine of the past 10 women's major winners have committed to the Women's British Open including defending champion Georgia Hall who pledged her support for the prize increase on Twitter.
Ladies European Tour winner Meg MacLaren was more measured in her praise of the R&A's decision.
Credit to the @RandA and @AIGWBO for moving things in the right direction. Still a long way to go (total prize fund is still less than HALF of the men’s), but credit where it’s due Looking forward to being a part of this @WoburnGC next month #timesarechanging https://t.co/SGDYrk1kea— Meghan MacLaren (@meg_maclaren) July 8, 2019
The Women’s British Open achieved major championship status in 2001 and, until this year, annual prize fund growth had been incremental.
Other women's major championship have made strides in prize money growth in recent years though they remain well in arrears of the prize money at the corresponding men's championships.
The 2019 US Women's Open - with a prize fund of $US5.5 million - is still less than half of US$12.5 million on offer for the men at Pebble Beach last month.
The recent KPMG Women's PGA - won by Australia's Hannah Green - was played for US$3.85 million while the men's PGA Championship at Bethpage Black in May was worth US$11 million.
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