A total of 100 apprenticeships will also be developed through the investment package, in partnership with Wiltshire College and the University of Staffordshire.
The MoD said the roles would cover disciplines from data and modelling to project management.
Overall, the new system would help to deliver on the MoD’s ambition to increase the Armed Forces’ readiness and progress transformation, it said.
Simulation, live systems and analytics will be used as part of the new technology to enable soldiers to train anywhere at anytime.
The training will use AI to replicate the complexity of modern warfare, according to the MoD, as well as spotting patterns, monitoring performance and supporting decision making.
“UK soldiers will be better prepared for modern warfare with a new training system that uses AI, advanced analytics and virtual environments to ready troops for rapidly evolving battlefields,” it said.
The announcement comes less than two weeks after Prime Minister Sir Keir Starmer announced a £15bn increase in military spending.