The world of sport has been decimated by the outbreak of COVID-19, which has seen the Olympic Games in Tokyo postponed by a year until 2021.
That had a knock-on effect with the World Athletics Championships, originally scheduled for 2021 in Oregon, pushed back by 12 months, while the 2020 European Championships have been cancelled.
A World Athletics statement said the fund will be used to help athletes who have lost the majority of their income from the suspension of international competition.
Resources from the 2020 and 2021 budgets of the IAF, of which Prince Albert II of Monaco is honorary president, will be allocated to help athletes.
World Athletics president and IAF chair Sebastian Coe will front "an expert multi-regional working group to assess the applications for assistance, which will be submitted through World Athletics' six Area Associations".
Olympic champion and 1500 metres world record-holder Hicham El Guerrouj and Olympic pole vault champion Katerina Stefanidi are among the members of the working group, which will convene in the coming week for talks over how to award and distribute grants to individual athletes and to assess means of raising additional monies for the fund.
"I would especially like to thank Hicham for bringing this idea to us, and Prince Albert for his strong support of this project," Coe said.
"I am in constant contact with athletes around the world and I know that many are experiencing financial hardship as a consequence of the shutdown of most international sports competition in the last two months.
"Our professional athletes rely on prize money as part of their income and we're mindful that our competition season, on both the track and road, is being severely impacted by the pandemic.
"We are hopeful that we will be able to stage at least some competition later this year, but in the meantime we will also endeavour, through this fund and additional monies we intend to seek through the friends of our sport, to help as many athletes as possible."
El Guerrouj added: "The pandemic is causing economic pain to people from all parts of society, including athletes, and this is a time when we must come together as a global community to help each other.
"I am delighted that Seb and World Athletics reacted so positively to my suggestion that we create a fund for athletes, and have made it happen with the support of the International Athletics Foundation.
"The suspension of competition has had a huge impact on many professional athletes because they can't earn prize money so I'm really pleased that we have found a way to assist them."
Prince Albert II said he hopes the initiative can help athletes continue preparations for next year's Games.
"I created more than 35 years ago the International Athletics Foundation with the late Primo Nebiolo to encourage and promote athletics and grant financial assistance to athletics federations and the most deserving athletes," he said.
"Since its inception the Foundation has distributed for these purposes more than $30million. I am delighted that we can put our resources behind this initiative so we can make a difference to the lives of athletes who are suffering financially at this time.
"We hope that this support will help those athletes preparing for international competition, including next year's Olympic Games, to sustain their training, support their families and that this will relieve them of some stress in these uncertain times."
The 20-year-old had to undertake a three-day car journey from Dnipro to Serbia to reach the competition after her country was invaded by neighbouring Russia in late February.
Mahuchikh, who managed bronze at last year's Olympics in Tokyo, produced a first-time clearance of 2.02m with her final attempt.
She revealed the psychological difficulties she had in leaving her homeland for Serbia after her winning efforts, and Mahuchikh has now suggested her performance embodied the strength of Ukraine.
"I received a lot of messages," she told BBC Sport. "It was like 'thank you that we are smiling'.
"They've had a lot of bad news; they're in a war. But when they see me winning, that I won the gold medal for my country, for Ukraine, it showed that Ukrainians are strong people.
"I gave them the opportunity to smile a little bit. It has been difficult [to focus] but I must do this and show to the world that Ukraine is a strong nation.
"We have strong people and we never give up and we will protect our independence and our freedom on all fronts."
Mahuchikh also detailed the ongoing struggles in her home country with her family split across Dnipro and Poland.
"It was a little bit frightening but after this I called my coach and we left Dnipro, and went to a village nearby, the home of my coach," she added.
"My family stayed in Dnipro in their flat but every day we saw each other. But it was so complicated to me when we decided to go to the World Championship. I didn't know when I would come back and see my relatives and my family.
"The Ukrainian Federation manager said it would be good to go abroad now, so we went to Moldova, Romania and then Belgrade.
"It was the longest trip that I have ever been on, three days by car. It was so difficult but we arrived in Belgrade on March 9 and the Serbian Federation said they would let us do some track and field training to recover."
Russian athletes are currently banned from competition as global sporting bodies continue to impose sanctions to deter further attacks, and Mahuchikh supports the decision.
"I think World Athletics made the right decision because Russian athletes must understand that Russia started the war," she continued.
"We shouldn't have to compete when our people and children are being killed by the Russian military, it's terrible. They must understand that Russia started the war, they were the aggressors."
The 20-year-old had to undertake a three-day car journey to reach the competition in Belgrade after her country was invaded by neighbouring Russia in late February.
Mahuchikh, who claimed bronze at last year's Olympic Games in Tokyo, produced a clearance of 2.02m with her third and final attempt, beating Australia's Eleanor Patterson and Kazakhstan's Nadezhda Dubovitskaya to gold.
Speaking after her triumph, an emotional Mahuchikh discussed the difficulties she faced in leaving for Serbia, saying she could not concentrate on her preparations but hoped she had achieved something important for her homeland.
"It was very important for me, my family, my country," Mahuchikh told BBC Sport. "I don't think about competition, training.
"For me, coming here was difficult, three days by car, and to jump here was so difficult psychologically because my heart remains in my country.
"It's so difficult, but I think I've done very well for my country because I protect my country on the track.
"I think it's a very important thing for my country."
At last year's Tokyo Olympics, Mahuchikh was beaten to the gold medal by Mariya Lasitskene, who was representing the Russian Olympic Committee.
The World Athletics Indoor Championships, which finish on Sunday, are one of numerous major sporting events to exclude Russian athletes, including Lasitskene, as part of world sport's backlash to the invasion.
Over 130 people have reportedly died in China after contracting the SARS-like condition in recent weeks, and the World Health Organisation called for global action to combat the deadly outbreak on Wednesday.
World Athletics has decided it would be wrong to stage a major sporting event in China given the current circumstances, but said it intends to hold the event in Nanjing 12 months later than planned.
The championships had been scheduled for March 13-15, and World Athletics said in a statement: "It is with regret that we have agreed with the organisers of the World Athletics Indoor Championships in Nanjing to postpone the event to March 2021.
"We know that China is doing all it can to contain the new coronavirus and we support them in all their efforts but it is necessary to provide our athletes, member federations and partners with a clear way forward in what is a complex and fast-moving set of circumstances.
"The advice from our medical team, who are in contact with the World Health Organisation, is that the spread of the coronavirus both within China and outside the country is still at a concerning level and no one should be going ahead with any major gathering that can be postponed.
"We have considered the possibility of relocating the event to another country and would like to thank the cities that have volunteered to host the championships.
"However, given concerns still exist regarding the spread of the virus outside China, we have decided not to go with this option, as it may lead to further postponement at a later date."
