Carlisle College is receiving around £5m from the North West Development Agency towards a new facility to replace redundant buildings on a site in Victoria Road.
Steven Broomhead, chief executive of the NWDA, has presented the college with a signed contract for the funding which is contributing to its new £9m scheme.
He was joined by Cllr Duncan Fairbairn, Cabinet member responsible for schools and learning at Cumbria County Council, which has contributed £3m towards the college's development.
Both guests were welcomed by David Carter and Moira Tattersall, chair and principal of Governors respectively. They visited the site of the planned new build and got to see how students are following the work of the land surveyors. They also got to see the work being done by electrical and construction students, who are putting the finishing touches to new plastering bays in the construction workshops that they have built.
David Carter, chair of Governors, said: "The new capital investment in the college will generate jobs and economic activity in Carlisle that is greatly welcomed. It is very fitting that we take this opportunity to showcase the work of our students who are hoping to secure employment as apprentices in the building industry in the coming months."
Steven Broomhead, of the NWDA, added: "Strengthening further education in Cumbria is vital to transforming the regional economy. The NWDA works hard to ensure education, access to skills and quality training plays a key role in helping to develop the knowledge, skills and creativity required to give the region a competitive edge."
Cllr Duncan Fairbairn, Cabinet member responsible for schools and learning at Cumbria County Council, said: "This is a significant investment in the college's new facility and also a significant investment in the education of young people in Carlisle and across north Cumbria."
Tenders for the construction of the new building are currently being evaluated and a preferred contractor will be selected in the next few weeks.