Coleraine were one of three Irish Premiership clubs to miss out on progression to the next stage of the funding process, along with Crusaders and Portadown.
League of Ireland side Derry City also missed out, while Institute and Limavady United were the other clubs from the north west of Northern Ireland not included in the list announced by Lyons on Thursday morning.
“Geographically, for me, the north west has been shafted again,” Higgins said.
“You might say it is sour grapes because of my connection to Coleranie Football Club and Derry City, but I’ll not talk about either – I’ll talk about Institute.
“If there’s one club that needed support it was them. For me, it’s an absolute disgrace.”
Higgins was referring to the loss of Institute’s home ground in Drumahoe, in 2017 after flash flooding left the stadium unusable with Japanese Knotweed.
Institute now play their home matches at Derry City’s Brandywell Stadium and Drumahoe is now being demolished.
Higgins said Stute had been “dealt the worst hand out of everybody” and felt the process was unfair.
“In 2017 they lost their ground through no fault of their own. It’s a brilliant football club run by brilliant people, and they’ve been absolutely trampled on from what I can see.
“They had a disaster eight years ago and they’ve been given no backing at all. That surprises me in one sense, but when you look geographically where they are based, it doesn’t surprise me at all.”
Speaking at the announcement of funding in Belfast on Thursday morning, before Higgins gave his reaction, Lyons said the location of clubs had not come under consideration.
“This hasn’t been done in terms of geography, it has been done in terms of need and other criteria that we set out,” Lyons said.
“Yes, you can look at the two big ones in Belfast but there are many others throughout Northern Ireland.”