The Long Forest Project has been developed by Keep Wales Tidy in partnership with the Woodland Trust, with support from the Heritage Lottery Fund and the Esmee Fairbairn Foundation.
The project includes a series of measures to create habitat links around the island, among them a planned squirrel bridge crossing an A-road by the National Trust's Plas Newydd on the Menai Strait. In all, 100,000 trees will be planted and around 120km of hedgerow improved.
Red Squirrels Trust Wales scientific advisor Dr Craig Shuttleworth said: "Planting trees to link up woodland habitats is a fantastic way of helping a wealth of native wildlife, including the red squirrel.
"Anglesey has one of the most important squirrel populations in the UK and it is great to see so many volunteers and landowners supporting the Long Forest project."
There are thought to be around 800 squirrels on Anglesey, which declared itself free of the competing grey squirrel in 2015 after an 18-year eradication programme.
Meanwhile on the Welsh mainland, the struggling red squirrel population in Clocaenog Forest near Ruthin, Denbighshire, another designated priority area for the species, is being boosted by release of captive-bred squirrels, initially numbering seven, overseen by Natural Resources Wales (NRW).