Danny Alexander said that additional resources would be used to pay for extra police officers, and other bills incurred by hosting the summit at Co Fermanagh.
Sinn Féin had feared the PSNI would have to shell out for the policing bill, estimated to be around £50m.
But Mr Alexander gave assurances on Monday that would not be the case.
Mr Alexander will also meet with Finance Minister Sammy Wilson to ensure the costs locally are kept to a minimum.
He added: "There are some costs that will need to be borne, but the vast majority of the costs, both additional costs in terms of funding policing coming in from other parts of Great Britain to here in Northern Ireland with those costs and also the costs that fall to Northern Ireland themselves, will be borne by the Treasury through the reserve."
We've put funding arrangements for the G8 which make sure that the UK government is picking up the large majority of the funding costs for the policing of the event.
World leaders will meet at the Lough Erne resort on 17 and 18 June for the summit, hosted by Prime Minister David Cameron.
Ahead of the event, police have revealed members of the public may experience disruption especially close to Belfast International Airport.
Senior officers advised of potential delays for those travelling in or through Antrim, Crumlin, Templepatrick, Killead or Aldergrove areas between 14 and 19 June.
Chief Superintendent Henry Irvine is in charge of the security operation. He said police have been steadily increasing their presence around Belfast International Airport.
He explained: "As a number of the G8 world leaders and their delegations will enter Northern Ireland via Aldergrove and Belfast International Airport, it is essential that these sites along with the surrounding routes and land are kept secure.
"As we approach 17 June this operation will intensify and the visible police presence will increase further."
It is our aim that throughout the security operation the community, businesses and motorists should be able to go about their daily lives as normally as possible however in order to make this happen we need people to work along with us by heeding the advice given.
Chief Superintendent Henry Irvine
Vehicle checkpoints and searches will be carried out in the area, but Chief Supt Irvine said police will try to keep disruption to a minimum.
Police have been meeting with local residents and landowners ahead of the G8 Summit to inform them of any implications linked to the security operation.
Chief Supt Irvine said police planning had also factored in any protestors that the event may attract.
"Every effort is being made to ensure that our security operation is effective but that life can continue as normal throughout. We have been working hard with our partners in education, health, business and others to achieve this and with the cooperation of the public we are confident that we can."