Manchester Metropolitan University's plans for a new Birley Fields campus at Hulme has received an injection of £28.5m of funding.
Manchester University is demolishing the union building and creating a new Commons Building and new science buildings on the 30-acre site, formerly the site of Manchester 'Crescents', which is costing in total £150m.
Proposals have been backed with £10m from the Higher Education Funding Council for England, Hefce for short, and a £8.5m grant from the North West Development Agency.
Manchester City Council, which approved the proposals in July last year, has also formally transferred land worth a further £10m to the university to ensure the success of the move. The campus has been designed by John McAslan & Partners.
Prof John Brooks, vice-chancellor of Manchester Metropolitan University, said: "The Birley Fields campus brings higher education right into the heart of the community, raising educational aspiration, boosting local business and providing new opportunities to access university knowledge and resources.
The campus will house 6,000 staff and students in education, health and social care programmes and research.
Among the proposals is a commitment to make the campus the most sustainable in the UK with significant open space and an aspiration to produce zero waste, water and carbon.
Steven Broomhead, chief executive of the North West Development Agency, said: "Structurally, the development will incorporate leading edge environmental technologies, ensuring efficiencies can be made as we move towards a low carbon future."
An estimated 11,000 people were consulted through a series of events and bulletins during a three-month community consultation. The NWDA said 80% of those who responded to a questionnaire about the development believe the campus would have a positive impact on Hulme and neighbouring Moss Side.
Architectural plans are now being developed to take the campus from concept to reality. The partners involved aim to complete a planning application by early next year.
Prof Brooks added: "With the university providing the remaining funding, the project is now ready to go. All the partners are excited by the potential to deliver a leading edge environmental community campus within the heart of our city."
The campus expansion is expected to add £29m a year and 350 jobs to the local economy through shops and services.