The winner of this year's tournament at Woburn on August 1-4 will pocket $675 000, up from the $490 000 Georgia Hall earned from winning last year's tournament.
"We recognised that more needed to be done to elevate the prize fund for this great championship and are pleased that we have been able to make a significant increase this year as part of The R&A's commitment to women's golf," said chief executive of The R&A, Martin Slumbers, in a statement.
The move comes as FIFA faced criticism for the huge disparity in prize money on offer between the men's and women's World Cups.
A total prize pot of $10.75 million is on offer at the men's Open Championship at Royal Portrush later this month with the winner claiming $1.89 million.
"This is an important first step and we know it will take time to move closer to achieving parity with the men’s game," added Slumbers.
"We will continue to work toward the long-term goal of a sustainable business model but we can't do it alone and the support of fans, sponsors and media are all key to achieving that success."