Speaking on a visit to Jaguar Land Rover in the Midlands, David Cameron said the Higher Apprenticeships Fund will help companies offer apprenticeships up to degree equivalent, with small and medium-sized enterprises in particular likely to benefit from the scheme.
Private firms are being invited to bid for a share of the money, with the first apprenticeships beginning in October.
Mr Cameron said: "We are investing in apprenticeships because we know they work - they are good for people who want to get ahead, good for business and good for the country."
Business secretary Vince Cable added that such schemes will deliver the highly-skilled workforce the UK needs going forward.
Education secretary Michael Gove told a special apprenticeship seminar organised by the Gloucester branch of the Federation of Small Businesses that the government is committed to delivering apprenticeship opportunities for young people, This Is South Devon reported.