The funding is one of 12 Knowledge Transfer Accounts (KTAs) being awarded by the EPSRC.
The investment is expected to help Loughborough form links with industry through activities such as two-way secondments and professional development opportunities.
Focusing on work in areas such as healthcare, energy and transport, the KTA will provide workshops to identify new research activities and improve industry links.
Dr Kathryn Walsh, the university’s deputy pro-vice-chancellor, said: ‘The EPSRC’s considerable investment is an excellent acknowledgement of our long-established tradition of engaging with industry, commerce, social enterprises, the public sector and government to bring about real economic and social change.
‘We are also committed to developing people, through fellowships to reward our most promising new researchers and internationally esteemed academics, and by offering secondments to industrial experts to work with us to exploit pioneering technology that will ultimately benefit the UK economy.’The KTA follows a previous Collaborative Training Account, also awarded by the EPSRC to improve research-related training opportunities.