U.S. Sen. Dick Durbin announced Saturday that the Department of Defense awarded the grant to UI Labs, a partnership between public and private groups, including universities and manufacturers.
The federal grant adds to the $250 million that UI Labs has already raised for the research hub.
The new national Digital Manufacturing and Design Innovation Institute, or "Digital Lab," will research ways to make American factories more efficient and improve military readiness.
Durbin says the lab will revolutionize the way the country approaches manufacturing.
He also says research done at the lab will make America more competitive on a global stage.
President Barack Obama proposed the manufacturing institutes last year.