The rocker joined Gov. Chris Christie and first lady Mary Pat Christie to announce the donation during a ceremony where the native son rocker got bigger cheers than the popular governor.
"My being here is not political," Bon Jovi said during a news conference in front of the borough hall in the central New Jersey town. "It's emotional."
Bon Jovi, who has long had philanthropic interests, has been highly visible in his home state since the storm hit.
Days after the October 2012 storm, he visited washed out Sayreville, a flood-prone blue-collar community along the Raritan River. It was the town's third devastating flood in three years.
He was a headliner of a relief concert and is, along with Bill Bradley, Bruce Springsteen and others, a co-chairman of the storm relief fund overseen by Mary Pat Christie. She said that the fund, which is designed to help people with needs not covered by government aid or insurance, now has brought in $38 million in donations from 29,000 people.
Christie thanked the star for staying true to his New Jersey roots.
And Bon Jovi, who said that he thought playing local block parties as a teenager meant he'd made the big-time, thanked the people of his hometown for their good deeds after the storm.
"The unsung heroes are the volunteers who without notice helped house, feed, clothe and just comfort," he said.
If not for Bon Jovi, Sayreville might be best known for floods.
There were major ones in 2010 and 2011 before Sandy. It's the first town in the state where the state government attempting large-scale buyouts of frequently flooded properties.
Don Garboski, 79, who has lost property in five storms in the last 21 years, is considering a buyout. But despite all the stress of the storms, he was all smiles Monday after watching Bon Jovi announce the donation.
"He means a lot," Garboski said.