The CoLab facility at Letterkenny Institute of Technology is to be doubled in size.
The centre, which encourages the development of small businesses, is to be extended by 20,000 sq ft.
The expansion is part of plans drawn up for a partnership between the North West Cross Border Region Group, the Northern Ireland Science Park, Letterkenny Institute of Technology and Ilex in Derry.
The aim is to set up a regional Science Park campus, modeled on the development in the Titanic Quarter in Belfast which would provide a significant boost to the northwest economy
Manager of the CoLab Patsy Donaghy said he was delighted by the planned extension.
The extension is part of the European Unuion’s INTERREG IVA programme.