The universities - Glasgow, Heriot-Watt, Edinburgh and Dundee - will work with Scottish Enterprise and the Scottish Blood Transfusion Service on the project.
The industrial generation of blood would end current problems in maintaining supply of blood for transfusion, managing the risk of infection and ensuring compatibility between donor and recipient.
There is a massive unmet and increasing clinical demand for blood: in the UK alone 2.2m units of blood are used each year at a cost of around £140 per unit. It is estimated that the UK market could be worth up to £308m per year and worldwide over £11.2bn per year (based on an estimate of 80m units).
Co-ordinated by Glasgow University, the multi-disciplinary collaboration will involve teams in the biochemistry, engineering and social science fields.
The funding will support three key posts at Glasgow, Edinburgh and Heriot-Watt universities and contribute towards two further posts at Dundee University and the Innogen Centre within Edinburgh University.
April 1886: the Brunkebergs tunnel
First ever example of a ground source heat pump?