The industry minister, John Battle, is believed to have secured pounds 14m from Stephen Byers, the Secretary of State for Trade and Industry, to fund the initiative.
The money, will be spent over the next three or four years to help British industry reduce costs and become more environmentally friendly through the use of biotechnological techniques.
The bulk of the funds will go into grants to persuade firms to use biotechnology in their production processes, while the rest will be used on a publicity campaign.
Ministers are keen to widen the appeal of biotechnology from drug development, its traditional realm, to other areas of manufacturing.
The programme, set to be launched by Mr Battle at the end of the week, will initially target firms in the chemical, engineering and textile sectors, three industries which have been hit hard by the recent slump in UK manufacturing.
If it is successful, the programme will be widened to other sectors.