IBM today revealed plans to build a research and development facility at the University of Melbourne, where it intends to employ 150 staff within five years.
IBM said the facility will focus on building applications for natural resource management, natural disaster management and computational life sciences and healthcare.
The lab will open in early 2011 and within five years the university hopes to have trained 38 PhD students.
At a hastily-convened meeting in Melbourne today, Prime Minister Julia Gillard, Victorian Premier John Brumby and Science Minister Kim Carr - all graduates of the University of Melbourne - announced their commitment to the project.
The Federal Government will tip in $22 million over five years, Prime Minister Gillard said.
Gillard said that the ALP Government's investment in a National Broadband Network and in the education sector attracted IBM's investment.
Her sentiment was shared by Glen Boreham, managing director of IBM Australia, who said that the nationwide network plan "underpins the investment.
"I want to stress that Australia rolling out a ubiquitous national broadband network attracted this investment," he said.
Victorian Premier John Brumby refused to disclose the state's contribution, other than to say it was "substantial". He said revealing the figure would drive up the bids in a national bidding war to attract investment in Australia's various states.
Brumby told iTnews that IBM would not enjoy payroll tax deductions as part of the deal, but would recieve funding from the Victorian State Government "upon meeting certain milestones."
Brumby said IBM already employs several thousand staff in Victoria and was delighted to have attracted another ICT investment in the state.
Boreham backed the Victorian Government as being "clearly the leading state in our country in support of technology and innovation."
Natural resource management will involve building applications around monitoring, analytics and automation in verticals such as oil and gas, minerals, water, food resources - with solutions ranging from concerns with the sourcing of materials right through to their consumption.
The facility will also develop solutions for evacuation, communications and emergency response during natural disasters - focusing on understanding data whilst "in flight" rather than at rest.
Whilst IBM already boasts nine R&D facilities in Australia, IBM said the University of Melbourne lab will combine basic, applied and in-market research with the development of solutions.
Glyn Davis, vice chancellor of the University of Melbourne - who was said to have approached IBM to propose the union - said that a "co-production of knowledge" with the business world was the future of education.