The Higher Education Funding Council for England allocated an extra 13,576 full and part-time places - at a cost of around pounds 26m - after a slight easing of the strict cap on university student numbers.
The council said the bidding round, which will form a model for planning future university expansion, had given priority to institutions which planned to increase participation in higher education and were meeting the needs of their region.
Universities expect the number of places to increase by around 70,000 over the next three years, as part of Tony Blair's promise to bring 500,000 more people into higher and further education by 2002.
More than half of the 5,440 full-time places were for so-called sub-degree Higher National Diploma courses, most of which will be taught in further education colleges.
Sir Ron Dearing's report on higher education last year earmarked such courses for the bulk of expansion to help meet Britain's skill shortages.
Among the biggest winners were projects to expand opportunities for local communities.
Vice-chancellors welcomed the extra places. A spokesman for the Committee of Vice Chancellors and Principals said: "We are very much in favour of expansion in higher education."
University staff were offered a 3.8 per cent pay increase yesterday. The offer, which applies to lecturers and support staff, will be phased in over a year. Staff will get an initial two per cent rise, followed by another 1.8 per cent after eight months.
Peter Humphreys, chief executive of the Universities and Colleges Employers Association, said: "We have put forward an offer which we believe to be fair and equitable."