He said servicemen and women were "prized assets" which needed to be continually invested in, and should be thought of as high-performance athletes carrying their kit and a rifle.
The Foundation will now offer advice and resources to improve training for the whole of the armed forces. Tobias Ellwood, minister for defence, people and veterans, who served with the Royal Green Jackets, said they were hoping the new project would create a cultural change around the issue of promoting mental fitness.
When it comes to mental health, Prince Harry is quick to break down the "stigmas" associated with it - speaking openly about coping with his mother's death earlier this year, the prince hoped to start a national conversation about mental health.
Prince William spoke at the Data Observatory at Imperial College London, praising a research project which measured the success of the royal trio's Heads Together campaign that supported this year's London Marathon.
In a speech at the Ministry of Defence, the 33-year-old prince, who spent 10 years in the army, said that as the number of active-duty personnel had been reduced there was a premium on "every individual being fighting fit and deployable".
The funds, which come from their Royal Foundation, will go towards "a start-up for digital mental health innovation" to give the public access to help for mental health problems.More news: Tottenham Star Congratulates Harry Winks On England Debut
Harry was in the military for a decade, and from his first-hand experiences knows how important mental well-being is. It is an issue richly deserving of their support, and one which everyone concerned with society's welfare should also back.
The MoD said the move would build upon a recently launched government strategy aimed at improving mental health among military workers, civilian staff, their families and veterans. Seeing that three quarters of suicides in the United Kingdom are men, he said, "That's still a worrying statistic though, it really is".
The Duke added: "At the beginning, we were trying to understand why at home people weren't sharing some of their problems".
Before musing, "But I think it all has to start at home".
In February, before the campaign gathered momentum, a YouGov survey of 14,000 people revealed 45% of men and 52% of women were talking about mental health. "If you can't have a conversation with your loved ones, there's no way you're going to go to HR at work", he said.