Telford's bid for money from the government's Town's Fund has seen the town awarded £22.3m.
The money will go towards plans for the town's Station Quarter – a development planned between the town's railway station and Telford Town Centre.
It includes a digital skills and enterprise hub run by Telford College and the University of Wolverhampton, along with a partnership of local businesses.
The plans for the Station Quarter also include residential development, with proposals for eco homes in the area.
Telford & Wrekin Council said the funding will attract around £30m of additional investment, "creating the foundations for further development".
The money, which comes from the £3.6 billion Towns Fund unveiled in July 2019, is intended to kickstart urban regeneration and boost green transport infrastructure, tourism and jobs.
Graham Guest, Telford College’s principal and chief executive, said the development would be transformational for the town centre.
He said: “This is fantastic news – not just for the college’s own expansion plans, but for the whole town.
“It will transform the town centre, opening up exciting opportunities to the local community, and making Telford a much more attractive opportunity for inward investors.
“There are some fantastic plans to grow Telford’s Station Quarter, and we see it as a tremendous opportunity to create an ambitious and exciting innovation centre right at the heart of it.
“For us, it’s an opportunity to expand Telford College’s provision in a way which is accessible to a greater proportion of people across the borough, and which would raise people’s aspirations.
“It’s also about supporting local employers to ensure they can develop the sort of workforce they require – and help to retain these important skills in the town.”
Telford's Conservative MP Lucy Allan, said the money would be another contribution towards the town bouncing back from the impact of the Covid crisis.
She said: “I am delighted that the Government has approved Telford’s bid for Towns Fund monies. It’s been a hugely positive experience to be a member of the Towns Fund Board, collaborating with stakeholders and other community leaders, making the case for our town and successfully securing funding for Telford’s future.
"I am very grateful to the Secretary of State for Communities for his support for Telford and the Board. He was able to see for himself the impact this funding will have for our community when he visited Telford recently and met with our Board members.
"Telford’s £22.3m is a huge sum and will play a vital role in Telford’s future and its ability to bounce back post-pandemic. Skills training and technology will be the engines of new growth and jobs and will confirm Telford’s position as an economic hub fuelling growth across the West Midlands."
Graham Wynne OBE, chair of the Telford Towns Deal Board, said the investment would have a major impact on the town.
He said: "I am so pleased the government has approved our bid for our Towns Fund proposals. This is great news and a result of a lot of hard work by the board and the Telford team. The plans we have put together will have a transformational impact on Telford. They will kickstart our ambitious vision for Station Quarter, alongside the vital investment in to our borough towns.”
Councillor Shaun Davies, Labour leader of Telford & Wrekin Council, added: “This is great news for the town. I want to say a big thank you to the board and our partners who worked brilliantly to make such a compelling case to government.
“Our bid was for £25m and we still need to unpick exactly what the government funding will be allocated towards and the implications of the short fall. However, our proposals are so strong and exciting and I’m confident they will allow us to establish a model for regeneration that will benefit some of our most deprived communities.
“The future for Telford is bright and this funding is a game-changer as we move together into the next phase of the town’s development.”