The polytechnic is one of eight new research and development partners to join the Technology Transfer Voucher Programme, which was established by the ministry last year.
The programme is designed to make it easier and more economical for businesses to work with its 14 accredited research organisations on research and development projects.
It is focused on new developments within small to medium businesses in the health and medical technologies, information, communication, digital and agricultural technology areas.
The "vouchers" will provide 50% funding towards research and development projects, with businesses paying the other half.
Businesses which needed external expertise to answer their research and development questions could apply for the $5 million worth of funding.
The money could be used for design activities, trial production runs, or processes and product testing.
Polytechnic chief executive officer Phil Ker described it as a "wonderful opportunity" for the polytech.
"It's good for us, good for local businesses and good for Dunedin," he said.
Group manager of creative and applied technologies Alistair Regan said the programme would "strengthen the link between business and research organisations" and "provide a chance for kiwi businesses to grow and prosper".
"The voucher programme will become a major driver for applied research projects at the polytechnic with many local and regional companies," he said.
