The WellChild Centre will catapult Birmingham to the forefront of research in Europe.
Professor Ian Booth, who will be leading the project, said: This Centre is going to be Europes focal point into the study of childhood illnesses.
It is not just about the health of children, it is about improving the health of millions of people for generations to come.
Prof Booth said the centre, which will consist of six, hi-tech, computerised laboratories, would concentrate on research into a number of childhood illnesses, including diabetes, cancer, liver and inherited diseases.
It will also house a huge database of research into the health of 5,000 Birmingham youngsters over more than a decade.
Prof Booth explained: The 5,000 children which we have been assessing for the past 14 years were selected from birth to represent the racial mix of Birmingham. It is very exciting because, for the first time, we are able to make links between certain diseases and ethnic backgrounds.
The centre will bring together the expertise of the Institute of Child Health, The University of Birmingham Medical School and Birmingham Childrens Hospital.
Prof Booth said researchers would be trying to find answers to a number of key questions, including why childhood diseases were on the increase.
