The development will transform the university’s Pittville Campus in Cheltenham which, until 2011, was a site for teaching and learning, into a new student village.
The project also includes the construction of 577 new student rooms, as well as the refurbishment of 214 existing rooms, supporting the increased demand for places at the university.
A full design, build, finance and operation scheme, the new village will be operated by Uliving for around 50 years.
The project is set to be completed ready in time for the start of the 2017/18 academic year. Bouygues UK, the main contractor on the project, has already commenced on site.
Chancellor George Osborne said: “Better infrastructure is about improving people’s lives, and that’s why we are determined to get Britain building again.
“Our initial deal will deliver a modern, new student village to give the next generation of students the first-class facilities they deserve.
“In my Spending Review we announced that we’re extending our UK guarantees scheme to March 2021 to help kickstart other exciting infrastructure projects like this one right across the country.”