Stoke-on-Trent is to receive £4.3m to "kick-start" the creation of a £250m University Quarter.
Stoke-on-Trent is undergoing major regeneration
Minister for the West Midlands, Liam Byrne, said it was hoped the project would help to create thousands of skilled jobs in the city.
The £4.3m regional development agency funding will pay for the City of Stoke Sixth Form College to move and for a new science centre to be built.
The University Quarter will be a "major education hub" covering 400 acres.
It will be shared by Staffordshire University, Stoke Further Education College and Sixth Form College.
Mr Byrne said: "The reason that this is so important is that we think that something like 10 to 20,000 jobs will be created in the centre of Stoke over the next five to 10 years.
"And we need to make sure those jobs are good jobs and that means a big training and skills part of it."
John Edwards, chief executive of the regional development agency, Advantage West Midlands, said the University Quarter was one of its "key priorities" in North Staffordshire.
"The site is positioned at one of the key gateways into the city and this £4.3m is the kick-start to a massive programme of regeneration work that will drive up education and skills standards," he said.