Last night, Rotherham MP John Healey met government business minister Anna Soubry to ask the government for a further £4.5m to match the cash.
It will be used to help retrain some workers and also to support those jobs affected in the local supply chain.
In July, Tata Steel announced 720 job losses, most of which will go in Rotherham.
In October it announced a further 1,200 job losses in Scunthorpe.
Ms Soubry, Conservative minister for Small Business, Industry and Enterprise, said she could see no reason why the government could not match the funding if a strong bid was made by Sheffield City Region local enterprise partnership (LEP).
Mr Healey said Sheffield City Region expected the government to match local resources as has happened elsewhere in the country, such as a £9m deal for Scunthorpe.
He said: "It's down to us in South Yorkshire to pull our finger out and get the plans together to put to government.
"South Yorkshire MPs must then lean on the government to say, 'do your bit'."
A Sheffield City Region LEP task force will shape the overall plan.
Councillor Chris Read, Rotherham Council leader and member of Sheffield City Region, said: "Workers in Rotherham facing redundancy will want to know we are doing everything to support them and help them back to work.
"I am determined that we will do all that we can. Companies in the supply chain will feel the impact too, and we will also be working to support these businesses, and their employees, as a key part of this plan."
Ms Soubry said she had already asked officials to see if £1.5m for training and skills could be made available more quickly.

The UK agency said it lost 32,000 pages of data and 81 audio tapes linked to a bribery probe into BAE's al-Yamamah deal with Saudi Arabia.
The investigation into the huge arms deal was discontinued in 2006 after intervention from then-Prime Minister Tony Blair.
The SFO said the lost material comprised 3% of data about the deal.
It said it lost the items when it returned more material than intended to a source in the investigation.
The data loss took place between May and October 2012 and was discovered in May this year.
The SFO said it had contacted the 59 suppliers of data for the investigation to inform them of the situation.
"Any loss of data is a serious matter and the SFO has taken action to ensure no further material can be wrongly sent out," the agency said in a statement.
It continued: "The SFO has a duty to return material to those who supplied it, upon request, after the close of an investigation.
"In this instance the party requesting the return was sent additional material which had in fact been obtained from other sources."
Peter Mason, former director of security at the Palace of Westminster, has conducted a review and made some recommendations, including raising the profile of data handling as a key risk in the SFO's business.
A former civil servant, Alan Woods, is also conducting a wider-ranging review of SFO processes.
The al-Yamaha deal involved the sale of tens of billions of pounds worth of arms by BAE Systems to Saudi Arabia, beginning in the 1980s and ending in 2006 with the sale of 72 Typhoon fighter jets.
Allegations of corruption and bribery led to an SFO investigation in 2004, but it was closed in 2006 on grounds of public interest, amid concerns that relations with Saudi Arabia were being harmed.
The firm paid $450m (Â£289m) in fines in the UK and US three years ago to end other corruption investigations in both countries.
It pleaded guilty to one charge of conspiring to make false statements to the US government, including on deals in Saudi Arabia, and in the UK on one charge of breach of duty regarding payments made in Tanzania.
Speaking about the data loss, a BAE spokesman said: "Ultimately, this is a matter for the SFO and as far as BAE Systems is concerned, it is now closed."
Labour MP Emily Thornberry, shadow attorney general, said the incident "raises more questions than it answers" and asked what the government was doing to "ensure that this never happens again".
Sheffield City Region has announced £4.5m to help hundreds of steelworkers facing redundancy in South Yorkshire.
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The Serious Fraud Office (SFO) says it has lost thousands of documents relating to a probe into BAE Systems.