Factory 2050 will be the UK's first rapidly reconfigurable digital factory, aimed at advanced manufacturing where product design and production line details need to change to respond to customer demands.
AMRC executive dean Professor Keith Ridgway CBE explains that it is designed so that machines and manufacturing modules can easily be moved around the shopfloor.
"We want Factory 2050 to be the most advanced factory in the world and part of our long-term development of high value manufacturing – an area where this region has an international lead," states Ridgway.
"The development will ensure that the UK's advanced manufacturing supply chain can tap into the expertise it needs to make the most of those trends," he continues.
"Factory 2050 has also been designed to make young people enthusiastic about following a career in advanced manufacturing."
Factory 2050 will be the first building on the new Advanced Manufacturing Campus, which could see the university build up to a million square feet of new research facilities at Sheffield Business Park over the next decade.
The project also begins another step towards the development of the region's recently announced Advanced Manufacturing Innovation District – which is expected to become Europe's largest research-led advanced manufacturing cluster.
It will be centred on the M1 corridor near Sheffield and Rotherham, and is already home to the AMRC's facilities at the Advanced Manufacturing Park (AMP).
Fitting out of the Factory 2050's research block and workshop is due to begin early in May, with completion of the whole project scheduled for the end of 2015.
Once it is operating, Factory 2050 will employ 50 people, which Ridgway says could grow to more than 75. Many more jobs are expected to be created by companies wanting to locate nearby.