The money, announced Wednesday by Premier Alison Redford, will modernize and add two floors to the Schulich School of Engineering and allow for an extra 400 students when it is completed in 2016.
There are 4,200 engineering students at the university now.
"We're focused on investing in infrastructure and growing our highly skilled workforce," said Redford in a news release.
"By giving the University of Calgary a new, expanded space for its engineering school, we can increase the capacity to educate more engineers who can help us meet our goals and keep building Alberta."
The money will come out of Alberta's infrastructure budget as part of $650-million in dedicated capital funding for post-secondary schools
The announcement comes as all 26 post-secondary schools grapple with steep operating budget cuts imposed in Redford's last budget
The schools saw their budgets cut by almost seven per cent, totalling $147 million, after being promised a two per cent funding boost.
The move has led to staff buyouts and layoffs, and program cuts.
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