More than 80 new jobs have been promised at the Edinburgh Centre on Climate Change following a £1.6m injection from the Scottish government.
Plans are in place to build a new home for the centre at Edinburgh University.
Research into climate change and the development of low-carbon products and services will be carried out at the new base, due to open in 2013.
The Scottish government's capital investment secretary Alex Neil said the centre was "good news for jobs".
He added: "Scotland is leading the way on creating the skills and expertise needed to grow a thriving low carbon economy and this new centre will be another string to our bow.
"We will see world class research on how to tackle climate change and the absolute best advice for businesses on how to boost the bottom line by having a low carbon enterprise."Low carbon targets
Dr Andy Kerr, director of the Edinburgh Centre on Climate Change (ECCC), said the funding was critical to support the costs of construction of the ECCC building.
He added: "The outcome will be an inspiring physical space to support low carbon innovation in Scotland and the development and delivery of low carbon professional skills.
"This innovation will support Scotland and the other countries to meet stretching low carbon targets while thriving economically."
The Scottish government believes the low carbon market is valued at £8.49bn with a total of 4,098 companies in the sector, employing 73,000 people.
Government forecasts predict it will grow to about £12bn by 2016, with low carbon employment in Scotland predicted to increase to about 130,000 jobs by 2020.