The Regional Growth Fund (RGF) investment will allow researchers at Europe's second-largest steelmaker to develop next-generation steels for cars, aircraft, rail networks, skyscrapers, mining equipment and power stations.
Scientists and engineers will develop a range of materials to meet demands for renewable energy generation and more fuel-efficient cars and planes.
"This investment will strengthen our UK programme of cutting-edge research allowing us to develop new materials and applications to help our customers overcome their challenges, now and in the future," Karl Koehler, chief executive of Tata Steel's European operations, said in a statement here today.
"Our solutions contribute to our customers' innovative new products, such as more fuel-efficient vehicles and sustainable buildings. The Regional Growth Fund investment will support research projects which are key to us developing new customer solutions," he added.
While the RGF-funded research will initially take place at Tata Steel's R&D facility at Rotherham in South Yorkshire, the company is currently considering where the research will continue over the longer term with a possible relocation to a different UK site in the future.
"We are strengthening our R&D in the UK to further develop technology and knowledge partnerships with customers, suppliers, and universities," explained Debashish Bhattacharjee, Tata Steel's R&D group director.
The company has strong research links with academia in the UK and sponsors three joint chair positions at the University of Warwick, an endowed professorial chair at the University of Cambridge and other chairs at the universities of Sheffield, Swansea and Imperial College, London.
Tata Steel, which employs 18,000 people in the UK and exports about half of its 6-billion pound British-made products, also has a research presence at the University of Warwick allowing the company's engineers to collaborate with researchers from the university and other companies on British-led innovation, and is actively exploring how it can expand on those research links.
Roy Rickhuss, chair of the National Trade Union Steel Coordinating Committee, said: "Tata Steel's commitment and investment in R&D in the UK is welcome, as is the grant from the Regional Growth Fund.
Tata Steel is the largest operator in the UK steel industry and is a major supplier to many strategically- important UK manufacturers.
The company is also in discussions with a number of business partners to transform its Teesside research centre into a not-for-profit, open-access shared facility.