The grant funding follows a Department for Business, Innovation and Skills decision in May to reallocate £50m set aside for the Train to Gain programme to further education capital projects.
Colleges seeking grants will be expected to attract additional private finance, providing final projects of significant value.
Despite calls to leverage the grant to the maximum, projects are likely to be far less ambitious than the previous funding for further education colleges.
Colleges are only eligible if they have not received more than £5m of funding for building projects in the past from the then Learning and Skills Council.
Bidders also needs to show that the building project can be completed by September 2011.