The money will help researchers at the Institute of Molecular, System and Cell Biology in the University of Glasgow to simplify the process of designing, building, testing and modifying biological systems like bacteria for a variety of useful purposes.
A new field of science - Synthetic Biology - aims to engineer or replicate biological systems to help address major global challenges such as producing low-carbon fuel, reducing the cost of industrial raw materials and producing new pharmaceuticals.
The University in a statement said the funding is part of a larger pot of 20 million pounds set aside by the Department for Business, Innovation and Skills and distributed through the Biotechnology and Biological Sciences Research Council to help make the UK a world leader in research and application of synthetic biology.
An example of such bio-engineering is biosynthetic insulin for the treatment of diabetes, which first went on sale in 1982 and now accounts for 70 per cent of the insulin sold worldwide.
Prof Marshall Stark, who is leading the project, said: "Synthetic biology aims to apply engineering principles to the development of biological systems. Microbial cells, for example yeast or bacteria, can act as microscopic factories to make a wide variety of substances, including feed stocks for the chemical industry, additives for the food industry, antibiotics and pharmaceuticals.
"Yeast, for example, is used to convert sugar into alcohol through fermentation and is how we produce beers, wines and spirits. Although each cell is tiny, we can easily grow them on a massive scale, and thus obtain large amounts of products."
In order to produce micro-organisms that perform a specific function to make the desired product, the cells have to be programmed and this is done by the introduction of DNA sequences