The Liverpool School of Tropical Medicine has been awarded £18m to fund research into infectious diseases.
The building should be open by 2007
The cash will pay for a new unit, the Centre for Tropical and Infectious Diseases, which will look at fighting diseases such as malaria.
The cash has been provided by the North West Regional Development Agency and the European Objective One programme.
Minister for Industry and the Regions Alun Michael said it was "superb news for Merseyside".
He added: "It means that the region is stepping up to the frontline of the battle against some of nature's biggest killers.
"It is also strengthening its position as one of the leading international centres for biotechnology."
The four-storey building is expected to be completed by 2007.
The director of the Liverpool School of Tropical Medicine, Professor Janet Hemingway, said: "The School is a unique organisation - the only one capable of initiating, validating and trialling new drugs, vaccines and insecticides for current and emerging infectious diseases such as malaria, AIDS, tuberculosis and SARS.
"It already has an enviable track record in this area, having recently developing the first new anti-malarial for 25 years."