The province says $16 million of the loan will bear interest, but the remaining $9 million will be forgivable through the Nova Scotia Jobs Fund. Cooke plans to spend $150 million itself on the expansion, which is already underway.
The provincial government said Thursday the money will create more than 400 jobs.
New Brunswick-based Cooke is building a new salmon hatchery in Digby, opening a fish processing plant in Shelburne and expanding a feed mill in Truro.
The company has had to kill hundreds of thousands of salmon in recent months because of an outbreak of infectious salmon anemia in pens outside Shelburne Harbour.
Premier Darrell Dexter said he understands there is opposition to salmon farms but he's satisfied with provincial regulations as well as Cooke's own practices.
"This is an industry with great potential in our province," Dexter said in an interview. "We want to ensure that this is done in a well managed, environmentally sustainable manner."
Dexter said the loan will "reap great economic benefits for the province."
Nell Halse, vice-president of communications at Cooke Aquaculture, said the economic benefits will extend beyond employment with the company since it's expanding in rural areas of Nova Scotia that have been hard hit economically.
"This is a way ... to bring people back instead of having them leave the area," Halse said. "The jobs they create will attract all sorts of other business."
The government says most of the new jobs will be created in Shelburne, where the fish processing plant will employ 320 people.
Shelburne Mayor Al Delaney backed the government's move.
"It means a lot to our rural area," he said in a news release. "We are very supportive of Cooke Aquaculture. They understand our rural area and we look forward to working with the Cooke family to help make their business a success in Shelburne."
The government says the aquaculture industry employs more than 750 people in the province and contributes $57 million to the economy. Cooke operates Atlantic salmon and trout farms.
Last month, the province promised to increase oversight of the aquaculture sector in a new strategy for the industry.
Under the plan, the provincial government wants companies to report fish losses due to disease and mandate disinfection of aquaculture sites. It's also planning to develop a communications plan to share more information with the public about the industry by the end of next year.