Digital secretary Jeremy Wright made the announcement at the 5G World Conference at London Tech Week and said the money will go towards trialling new ways to help the logistics and manufacturing sectors increase their productivity and output.
Previous projects have focussed on healthcare, tourism, transport and broadcasting with the goal of improving the UK economy.
Mr Wright said the government wants to ensure Britain has a telecoms infrastructure that is fit for the future.
He added: “5G is about more than mobile phone consumers having a fast and reliable connection anywhere in the country. It’s a vital piece of technology that can be used to improve the productivity and growth of our industrial sectors.”
It was also announced that the government will work towards simplifying the planning process in England to further the rollout of 4G and aid the more rapid introduction of 5G.
This is all part of a long-term strategy to meet digital connectivity targets that were outlined in the Future Telecoms Infrastructure Review, so that better network coverage can support the way Britons live and work in the 21st century.
A target of making 500MHz of public sector spectrum available for commercial use by 2020 has already been exceeded and it is hoped more spectrum can be made available in the coming years.
Ten times faster than 4G, 5G technology is able to support more than a million devices per square kilometre. The first commercial rollouts from major mobile operators have only just begun – Vodafone’s is due to start next week – although deployments are likely to increase once Ofcom releases more radio spectrum by the end of 2020.