Data journalism platform ScraperWiki and the Open Knowledge Foundation were two of 16 winners in the international contest, which funds digital news experiments which use technology to inform and engage communities.
Together the winning projects received funding of $4.7 million which includes $1 million in support from Google.
Other winning entries, which can now start to put their ideas into action, include a web-based tool that aggregates user-generated content from social media during big news events, a funding model of microgrants for local journalism and a government transparency tool which displays court decisions.
The contest also has its first "second winner", with 2009 Knight News Challenge winner DocumentCloud securing $320,000 for its service which helps journalists analyse, annotate and publish original source documents.
UK start-up ScraperWiki, a Liverpool-based project, was awarded $280,000 of funding, which it will use to launch in the US and improve its platform's functionality.
The company also plans to run events across 12 cities in 12 US states "to liberate local, state and federal data", it said in a statement.
"I'm excited that the Knight Foundation is funding us to both make better tools for that community, and to run events to find the people who care across the US," the project's lead and company CEO Francis Irving added.
"The world is increasingly complex and its future tipped on a balance more than ever. Together we can sift the data, and perhaps help tip it the right way."
Fellow UK winner the Open Knowledge Foundation received $250,000 for its Spending Stories project, which will aim to contextualise news pieces on government finances by tying them to the data on which they are based.
In the US the Associated Press also received funding for its data journalism project, the second biggest single sum out of all 16 winners.
Its open source tool, called Overview, was awarded $475,000 and will help journalists find stories within 'document dumps' by cleaning up data, illustrating patterns and creating data visualisations.
The full list of winners is below, showing the grant they have been funded:
Project: iWitness, Adaptive Path, San Francisco: $360,000
Project: Overview, the Associated Press, New York: $475,000
Project: The Awesome Foundation, News Taskforce, Boston: $244,000
Project: PANDA, Chicago Tribune, Chicago: $150,000
Project: DocumentCloud Reader Annotations, Investigative Reporters and Editors (IRE), Columbia: $320,000
Project: FrontlineSMS, the Kiwanja Foundation, Palo Alto, Calif: $250,000
Project: Zeega, Media and Place Productions, Cambridge, Mass: $420,000
Project: The State Decoded, the Miller Center Foundation, Charlottesville, Va: $165,000
Project: Poderopedia, El Mostrador, Santiago, Chile: $200,000
Project: Nextdrop, NextDrop, Berkeley, Calif and Hubli-Dharwad, India: $375,000
Project: Spending Stories, Open Knowledge Foundation, Cambridge, England: $250,000
Project: The Public Laboratory, the Public Laboratory for Open Technology and Science, Cambridge, Mass: $500,000
Project: ScraperWiki, ScraperWiki, Liverpool, England: $280,000
Project: Tiziano 360, the Tiziano Project, Los Angeles, Calif: $200,000
Project: OpenBlock Rural, University of North Carolina, Chapel Hill, N.C: $275,000
Project: SwiftRiver, Ushahidi, Orlando, Fla: $250,000