It will use household waste and used textiles to develop new ones instead of relying on imported materials.
The Circular Economy Centre for Mineral-based Construction Materials (ICEC-MCM) will be led by University College London, aiming to develop systems for more efficient use and recovery of mineral resources.
This is expected to reduce UK construction minerals extraction by more than half a million tonnes per day and the generation of 154 million tonnes of mineral waste annually.
Other centres include the Centre for Circular Chemical Economy, the Circular Economy Centre in Technology Metals and the Centre for Circular Metal.
Energy Minister Kwasi Kwarteng said: “We want to further the UK’s status as a world-leader in finding green solutions to industrial challenges and projects like these are excellent examples of placing manufacturers at the forefront of the green industrial revolution.
“I am pleased to support these new cutting-edge research centres that will transform the way industry reuses and recycles materials – another great step forward as we build back greener from coronavirus and achieve net zero emissions by 2050.”