More than £28m is to be invested in the first phase of a four-year project to improve post-16 education in Hereford.
The Learning Village will link Hereford's three colleges
The city's three colleges will be linked under the Learning Village scheme which will see their existing sites redeveloped.
Herefordshire College of Technology's Folly Lane Campus will be completely redeveloped in the first phase with the addition of a new technology block.
Work is expected to start early in the New Year.
Funding of £28.4m was approved by the national Learning and Skills Council (LSC) earlier this week.
Local businesses will also be able to use the new Folly Lane site once work has finished for human resources.
Confirmation of funding for the second phase is expected in the first half of 2006.
Leader of Herefordshire Council, councillor Roger Phillips said: "This is as good as early Christmas presents get.
"The Council has been consistent in its support for the local LSC in constructing a package for major investment in the ailing Folly Lane campus to create a learning village capable of serving the Herefordshire community well into the 21st century."