Abstract: How to better leverage the role of the third distribution is an important theoretical and practical issue in promoting common prosperity in the new era. Existing research on the third distribution's role in promoting common prosperity overly focuses on instrumental rationality, neglecting its underlying value rationality and intrinsic essence, particularly lacking an internal logical analysis of the third distribution's promotion of common prosperity. This study introduces the concept of people-centered approach and the transmission mechanism of the third distribution promoting common prosperity based on a "value-instrumentality" two-dimensional matrix. This mechanism is manifested through the demonstration, stimulation, and collective creation effects at the cultural, institutional, and individual levels. At the cultural level, the third distribution can exert a demonstration effect by cultivating a culture of charity, advocating civil mutual assistance, and promoting a shared mindset to drive common prosperity, reflecting the value attribute of the third distribution. At the institutional level, the third distribution can exert a stimulation effect by optimizing the tax system, charity service system, and the connectivity between the third distribution and other distribution mechanisms to promote common prosperity, highlighting the instrumental attribute of the third distribution. At the individual level, the third distribution can exert a collective creation effect by promoting collaborative mechanisms, mutual assistance mechanisms, and embedded mechanisms to drive common prosperity, embodying the dual attributes of value and instrumentality.