Mars also issued a statement thanking the MI fans for supporting the cause.
"Ongoing challenges remain years later for Flint residents, and it's important that we don't forget our brothers and sisters affected by this disaster", he said.
The Mars' donation is being made by the singer himself and tour promoter Live Nation through funds from his MI concert.
Saturday's concert was part of Mars' continuing 24K Magic World Tour, which wraps up its North American leg with four November shows at The Forum in Inglewood, Calif., followed by swings through Latin America Oceana, Asia and Mexico into June of 2018.More news: Stephen Jones: Cowboys support Ezekiel Elliott, believe in backups
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During his performance of his song "Just the Way You Are", Mars paused to make the surprise announcement, dedicating the donation to "our brothers and sisters in Flint". The water was improperly treated, leading to elevated levels of lead.
Flint has been dealing with lead issues in their water since a controversial 2014 switch from the Detroit water system.
Foundation president Isaiah M. Oliver said he is "touched" by Mars' generosity.
Families continue to face the physical, developmental and psychological effects of the lead poisoning, especially among the children of Flint. Rapper Big Sean and R&B superstar Beyonce are among those who have donated to the foundation.