Universities and colleges are to provide training courses and professional education for employees.
The Higher Education Funding Council for England (Hefce) has invested £12m in a scheme which will develop tailored skills packages for workers.
Aiming to make job training more effective, it will run in the North East, North West and South West.
Sectors set to benefit include chemical and pharmaceutical, defence and marine, construction and health.
The scheme, funded for three years, builds on the government's Train to Gain programme which offers free training up to GCSE level.
This latest move will extend training up to degree level.
Pick and mix
A feature of the scheme will be to use specialists to assess what skills are needed in the workplace and to make sure local institutions can provide appropriate training or develop a new package.
One such example could be for workers who require technical skills to study relevant parts of a foundation degree without spending a year at university, and then to be given further training in management and development.
Hefce spokesperson Sarbani Banerjee said: "At the moment higher education is tailored to deal with 18 to 21-year-olds appearing on campus.
"On the whole they are not that good at meeting the needs of people in the workplace.
"This scheme will help provide made-to-measure packages as we can pick and mix from foundation degrees and degrees."
A range of sectors will be supported by the scheme:
Hefce said the project would ensure employers could provide higher level skills needed by the economy and society.
Its chief executive, Professor David Eastwood, said: "The learner benefits from significant personal development as well as contributing more effectively to business solutions."
Flexible lifelong learning improved employability, social equity and economic competitiveness, he said.
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