Google and news organizations have had a rocky time of it. To overdramatize the situation only slightly: Google insists that it cares about journalism as a necessity of our shared democracy; news organizations resent it as a (perceived) key cause of the financial strife that keeps them from fully defending that democracy. Today, though, brings an olive branch — a multi-million-dollar olive branch: Google is announcing that it will donate $5 million to encourage innovation in digital journalism. The grant will come in two parts: $2 million of it will go to the Knight Foundation, the journalism mega-funder — and $3 million will go to fund international news-innovation efforts, via a partnership with an as-yet-unannounced organization.

“Google has been pretty clear about the fact that we want to do our part to help fulfill the promise of journalism in the digital age,” says Chris Gaither, Google’s senior manager for news industry relations. And while, on the one hand, today’s grant is part of Google’s larger work in philanthropy — as policy, the company commits one percent of its profits and equity toward charitable efforts — it’s also a way for the organization to put some money where its mouth is when it comes to its relations with journalism. “In addition to all the business partnerships and business relationships that we have with news companies,” Gaither told me, “we also wanted to try to encourage innovation at a more grassroots level.”

The $2 million to Knight will be loosely divided: $1 million or so will go toward augmenting the Knight News Challenge, the foundation’s innovation contest, which will divvy up $6 million in grants this cycle instead of the usual $5 million. In its five years of operation, Gaither notes, the News Challenge has supported projects like DocumentCloud and Spot.us — projects that innovate not just the products of journalism, but the process of it — “and we thought it was a really interesting initiative to try to support.” The other $1 million or so will go toward Knight’s broad fund for grant-making, to encourage general innovation in digital journalism. And while Google and Knight, in the conversations leading up to today’s announcement, have discussed their shared goals and interests in the news-innovation space — business models to aid sustainability, new platforms for news, and digital skills training, in particular — ultimately, it’s Knight that will be making the decisions as to who gets funding.

“It’s really quite a wonderful — not just a wonderful endorsement, but a wonderful encouragement,” says Alberto Ibargüen, Knight’s president. “Because they’re not saying, ‘We want you to do X, Y, and Z projects.’ They’re saying, ‘We want you to continue the kind of work you’ve been doing — except do more of it.'”

While the $2 million for Knight will expand the funding of its existing efforts, the details of how the $3 million for international journalism innovation will be spent are still being worked out. Google expects to announce the details of that collaboration early next year. “We’re really eager to do even more internationally than what the Knight News Challenge provides for, so we’re going to be investing the remaining $3 million in journalism projects in other countries,” Gaither says.

So, for Google, why go the funding-partnership route, rather than simply funding nonprofits directly — or, for that matter, starting its own News Challenge-y contest? “We really see ourselves as a platform for discovery,” Gaither says, “and it’s important to us that we remain independent. [Google CEO] Eric Schmidt and other executives have made pretty clear over the years that we are not content creators.” Instead, “we have a symbiotic relationship with content creators, where we really help with discovery and monetization and other things,” he notes. Ultimately, “we do our thing, they do their thing.”

And, for that end, Knight was a good match — which is why Google made the overture to the foundation in the first place. “In this particular space, Knight is an expert,” Gaither said. “Knight has already been funding and trying to promote innovation in digital journalism for a while now — so they seemed like a perfect partner to pair up with for this one.” There’s also the fact that the newly articulated focus areas of the News Challenge — mobile, sustainability, authenticity (trust and reputation), and community — match nicely with Google’s broad goals when it comes to information. “We think that organizations of all shapes and sizes can really benefit from the grants that we’ll be providing,” Gaither says. And then there’s the organizations’ shared emphasis on scalability, impact, and open-sourcing. (Knight requires that its News Challenge winners open-source their code and generally make their platforms open and available to the public.) “We really try to encourage people to release things as widely as possible when it’s appropriate for their business,” Gaither notes. “And in this case, we think that’s a cool requirement that Knight has — and it’s something that we wanted to support, as well.”

For Ibargüen, the grant — in addition to providing extra funding, of course — is a validation of one of Knight’s core approaches to grant-making and to, even more broadly, the future of news itself: teamwork. “One of the reasons I’m so pleased by this is that so much of what we’re doing really requires collaboration,” Ibargüen notes. “To have a company like Google volunteer collaboration is not merely gratifying; it also really confirms the way to work.” The news space, he says, “is an area where collaboration really pays dividends. And I’m glad that the folks at Google agree.”

[Disclosure: The Knight Foundation is a financial supporter of the Nieman Journalism Lab.]