The announcement included funding for research into fusion fuels, advanced materials and facilities in Oxfordshire.
Culham, in the county, was previously home to a nuclear fusion reactor and is now one of the bases of the UK Atomic Energy Agency (UKAEA).
Energy Secretary Ed Miliband said: “Fusion has the potential to provide us with an abundant, clean power source and deliver energy security, whilst attracting the best technologies to our shores and training up the next generation of British scientists and engineers.
“Today’s record funding will provide investment and economic growth in Oxfordshire through our Plan for Change, delivering on net zero and creating the clean energy of the future.”
Deputy CEO of the UKAEA Tim Bestwick said the “record investment” in fusion was something the agency “very much welcomes”.
“Both Culham and West Burton, together with UKAEA’s other sites in Cumbria and in South Yorkshire, have important roles to play within the UK fusion programme,” he added.
A breakdown of how the investment will be allocated has not yet been shared by the government.