The grant goes to a Moredun-led consortium to carry out research work that will develop vaccines for worm parasites which infect livestock.
In making the announcement, the cabinet secretary for rural affairs and the environment, Richard Lochhead, commented on Scotland's enviable reputation as a world leader in the field of animal health research.
He said: "The work promises to improve further the efficiency of livestock production and deliver benefits to farmers in Scotland and the rest of the world."
Responding to the news, Julie Fitzpatrick, scientific director of Moredun, said:
"Vaccines are a very attractive option as they offer 'green solutions' to contribute to sustainable development of livestock which will be essential for food security across the globe."