Canterbury University will receive $260 million from the Government to support its rebuild programme.
The funding boost was announced this afternoon by Tertiary Education, Skills and Employment Minister Steven Joyce.
"The Government's contribution will fund a new science centre and expanded and upgraded engineering facilities. These will provide modern teaching and research facilities and cater for more students," he said.
"The 2010 and 2011 earthquakes have had a major impact on the university, with all of its buildings and facilities affected. As a result of the earthquakes, student numbers were down 15 per cent in 2012 compared to the previous three-year average."
Canterbury University would find it difficult to recover without the funding support, Mr Joyce said.
A campus-wide redevelopment programme, which would provide "modern, world-leading facilities" was expected to cost $1.1 billion over 10 years.
"The work programme will be a major contributor to the Canterbury recovery, and will be one of the largest building projects in New Zealand," Mr Joyce said.
"The university estimates that it will spend approximately $4 billion in capital and operating expenditure in the local economy over the next 10 years, as well as bringing an additional 3000 domestic and international students into the region."
Mr Joyce's funding announcement follows the recent approval of an $18.9 million capital injection for the Christchurch Polytechnic Institute of Technology.