The decision was taken during a meeting attended by Maharashtra Chief Minister Prithviraj Chavan and Goa Chief Minister Manohar Parrikar this evening, Maharashtra state government officials said.
The money would be deposited in bank accounts of the project-affected people, they said.
Officials said the decision was taken since the Tillari project was considered a special case.
Earlier, cash compensation had been fixed at Rs 3 lakh each, but a decision was taken to increase it during today's meeting.
Both governments would deposit the amount in bank accounts of the Tillaru project affected people after the Sindhudurg district collector approved the list of such project affected people, officials said.
There are 1,110 project-affected people, out of which 163 people have been given jobs, while 947 people would get the cash compensation, officials said.