Chancellor of the Exchequer George Osborne said the money would go to the most promising graphene-related research projects in British universities, the BBC reported Thursday.
One of the lightest, strongest and most conductive materials known, graphene is sheets of carbon just one atom thick with significant potential for use in electronics and other fields.
The government's investment funding was intended to move graphene technology "from the British laboratory to the British factory floor," Osborne said.
The discovery of graphene in 2005 brought Nobel prizes in 2010 for Manchester University researchers Andre Geim and Konstantin Novoselov.
The new funding is intended to help with the engineering challenges inherent in working with graphene sheets just an atom thick that are difficult to isolate, manipulate and reliably connect to other materials.
The University of Cambridge will receive almost $20 million for work on graphene-flexible electronics and opto-electronics, which could advance touch-screens and other display devices, while Imperial College London will receive more than $7 million to research aerospace applications for the material.