If the £27m plans are approved, New College Nottingham's Basford Hall campus would be completely demolished and rebuilt for opening in 2015.
The new campus, which would become a hub for training, could provide a jobs boost for the area.
The £9m investment has come from the Skills Funding Agency. The college said the rest of the money would be loaned.
The college said students would be able to continue their studies at the Basford Hall site during construction as the new campus would be built around the existing one.
Dawn Whitemore, principal and CEO of New College Nottingham, said the campus would become a regional hub for training in construction, science, technology and sustainable technologies.
She added: "We are determined to ensure it is a true 'community college' which reflects the hopes and aspirations of those living nearby, we are committed to supporting everyone who wants to learn, wherever their starting point."
Basford Hall campus, which dates to the 1960s, was saved from closure six years ago. At the time the college had wanted to sell it because it said it would be too expensive to update.
A Nottingham college has secured £9m of funding towards its multi-million pound redevelopment of one of its sites.