The arts and media centre, due to open in September 2008 on Adelphi Street, will add to the massive regeneration of Chapel Street and The Crescent.
It will house a 300-seat theatre, sculpture park and TV studios, and will cater for 3,000 students and 150 staff.
The Salford University development has got the backing of one of Tony Blair's advisors, Charles Leadbeater.
Speaking at a conference on culture-led regeneration at the university, he said he hoped the new arts and media centre would help make Salford "the best place to grow up, grow old, live and work".
Prof Richard Towell, Dean of the Faculty of Arts, Media, and Social Sciences at Salford University, said: "The university is committed to the vision of a revived Salford and is showing its support for the wider social inclusion agenda."
The building, together with the Centenary Building, which won the Stirling Prize for Architecture in 1996, and Adelphi House, will form a new linked campus.
It will be built on wasteland next to Adelphi Street and Peru Street. Finance will come from existing university funds, a bank loan, and new investment. A dedicated fund raising manager is being appointed this month.
Chapel Street is already a magnet for media and creative industries with Salford City Council helping a dozen firms set up there this year. Manchester Midi, a music media training and production company, based in Bexley Square, off Chapel Street, relocated there from Ancoats, Manchester, several months ago.
A company spokesman said: "Our new location provides a wonderful working environment. We were beginning to be priced out of Manchester's northern quarter and noise and lack of daylight through renting out a basement was testing."
He added: "We used a council business grant to renovate the building and put in security features. We're now hoping to convert more of it into music studios we can rent out.
"The work that is being done by the council and its partners to encourage businesses like ours to relocate is brilliant. We feel that we're here right at the start of the Chapel Street renaissance."
Regenerating Chapel Street and the surrounding area is a key part of the newly formed Salford Urban Regeneration Company's vision to make central Salford an active, vibrant urban district. Pedestrian-friendly green boulevards, with cafes and bars are planned for Chapel Street, The Crescent and nearby roads.
Coun Derek Antrobus, the city's planning spokesman, said: "There's a real buzz around the Chapel Street quarter.
"It benefits from being right on the edge of Manchester City Centre. There is a unique feel to it and it brims with character. Its reputation can only continue to grow, the more like-minded media and creative businesses we can attract."

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