The Church has faced a backlash over its plans to spend the money, with a group of MPs branding it a 'legally dubious vanity project' in a letter.
But the Right Rev Dame Sarah Mullally, who is formally set to become the 106th and first female Archbishop of Canterbury, insists it should go ahead.She wrote: 'The Church of England's historic links to African chattel enslavement are a serious matter, and it is right that they are approached with care, clarity, and respect for the responsibilities entrusted to the Church.'
She added that the funds have been set aside as a 'repentance' for its investment in slave-trading companies, but insisted it would not divert cash away from parishes, with £1.6billion already allocated to support local churches over the next three years.
'Our calling to confront historic injustice and our commitment to sustaining parish life therefore both flow from the same Gospel imperative: to love our neighbour as ourselves and to enable all to flourish,' she wrote in the letter to MPs.
The Project Spire plan, which was endorsed by former Archbishop of Canterbury Justin Welby, was announced after a report found that a fund established by Queen Anne in 1704 to support poor Anglican clergy had invested in African chattel slavery.
The project would act as an 'investment fund' to provide 'seed capital' for businesses and community projects that are run by or benefit black communities.
In a letter to Dame Mullally, MPs alleged that the grant would divert funds from parishes, saying that the church had a duty to spend its money on its local churches and priests.
However, in a letter to Dame Mullally, seen by the Times, MPs alleged that the grant would divert funds from parishes, saying that the church had a duty to spend its money on its local churches and priests.
They claimed the fund was not in line with the church's core purpose and the money should be sent on 'strengthening parishes'.
The Church Commissioners also responded to the MP's calls, saying that the funds invested in parishes and priests over three-yearly periods have increased from £790 million in 2019 to £1.6 billion today.
They added that the church's previous investments in slave-trading companies were 'a prerequisite for responsible asset ownership and robust risk management'.
'As a Christian responsible investor, theological considerations are essential. A church that ignores our links with a fundamental historic wrong cannot credibly claim moral leadership in the present or the future,' they wrote.
A recent survey to Anglicans has found 61 per cent of churchgoers say they would redirect donations to other charities if the Church Commissioners - the institution's financial arm - earmarked money for reparations.
A poll by Merlin Strategy to 500 churchgoing Anglicans found 81 per cent said Church money should be used to support local parishes instead, with only 19 per cent backing reparations as a priority.
As it stands, the Church Commissioners are pressing ahead with plans to pay £100million in slavery reparations, spread over nine years.
Earlier this month, a spokesman for the Church of England said: 'A record £1.6bn is being distributed over the next three years to support the mission and ministry of the Church of England, prioritising clergy wellbeing, the funding of local parishes in the country's lowest income communities and encouraging the growth of congregations.
'The Church commissioners' commitment to supporting disadvantaged communities affected by the legacy of transatlantic chattel enslavement is the result of forensic research by leading independent experts, which evidences our historic links to this fundamental wrong.
'Recognising this past is consistent with the Church's responsibility for moral leadership.'