Science Foundation Ireland, the body which funds research on behalf of the Government, is to provide €11.7m for the Irish Software Engineering Research Centre (ISERC).
The centre will be located mainly at the University of Limerick, and is designed to be a focal point for software researchers based in Ireland.
Announcing the funding, Enterprise, Trade & Employment Minister Micheál Martin said the centre would provide the world-class infrastructure needed to excel in this area.
The centre will also involve top researchers working at Trinity College, UCD and DCU, under the leadership of Professor Klaus Pohl, scientific director of the ISERC. Researchers from a number of companies - including IBM, Iona and Intel - will also work with the academic researchers.