More than 40,000 homes have been flooded and thousands of people evacuated as a result, according to the Ukrainian emergencies ministry.
Addressing an emergency meeting of the country's National Security and Defense Council, President Viktor Yushchenko said the state of emergency would last three months.
On Sunday, he declared the regions hit hardest by the floods national disaster areas.
The Cabinet proposed at an emergency session Monday allocating around $296 million for clean-up operations.
"We will submit all these amendments to the Ukrainian state budget to parliament later today," Prime Minister Yulia Tymoshenko said.
Arseniy Yatsenyuk, speaker of the Supreme Rada, said Ukraine's parliament, which is on its summer recess, could hold an extraordinary session to discuss the allocation of budget funds for dealing with the aftermath of the floods.
Tymoshenko said earlier Monday that her bloc had already collected 155 signatures in support of holding an emergency parliamentary session.
Taras Stetskiv, a member of the pro-presidential Our Ukraine-People's Self-Defense bloc, pledged his party would support the initiative. No other parties have yet commented.
A new storm warning has been issued in Ukraine for Monday through Wednesday. First Deputy Chairman Oleksander Turchynov said earlier the country had not seen such flooding for a century.