Keep some portion in cash/liquid. Invest the balance is low risk items. Your goal should be to outpace inflation and earn a decent return. The amount of risk you should be willing to assume is also a function of your age.
If you are willing to live humbly, you should be able to live off the investment income and preserve most of the principal. If you earn a mere 3 points/year that is 150K pre tax. If you have clue, you should be able to do better than that in the present environment. When inflation kicks in again (inevitable), returns will be bigger nominally but not in terms of purchasing power.
If you don't own a house, buy a decent (not an overpriced one) in an area in which you wish to live. Eventually, housing will recover and you will make money on the house if you chose one wisely and don't overpay. I am not a fan of US currency long term. Current fiscal policy will not end well IMHO. While I would keep some portion liquid, I would not keep the whole amount in cash.
Depending how you acquired the windfall, you will probably be faced with a hefty tax bill.
If it was me, I would buy a nice piece of property on the outskirts on an area that I liked and wait for "progress" to move out that way at which point I would sell and repeat the dance. Just don't overpay to begin with. My big extravagance would be to build a tennis court.
Most of the people who lose fortunes invest in businesses they know nothing about, buy huge houses at huge prices, invest in crazy, volatile things, get married and divorced multiple times, make bad loans, etc. Should be easy enough to avoid if one is somewhat cautious.