Work will include a £250m redevelopment of the university’s student accommodation and Ocon Construction is currently working on the £44m first phase which is due to open in 2012.
A further £350m has been earmarked for investment in the academic estate at the university’s city centre campus and at its Leahurst campus on the Wirral.
Leader of Liverpool City Council, Councillor Joe Anderson, said: “This isn’t small scale stuff.
“The University of Liverpool wants to punch its weight as one of the country’s leading universities and one of the finest research centres in the world. This investment will go a long way to helping it do just that.
“These proposals will also provide jobs and employment opportunities for local people, not to mention the promise of apprenticeships to help people gain vital experience in their trade.
“They will leave a lasting legacy of training and up-skilling the people of the city. I want to welcome this project, and look forward to watching it develop.”
Steve Dickson, Director of Facilities Management at the University, said: “We know from market research that in order to attract the best students, the University needs to offer more accommodation at its city centre campus, particularly self-catered and en-suite rooms.
“Applications for our accommodation have doubled this year and it’s important that we make this significant investment in order to meet student demand in the future.”
As well as refurbishing existing accommodation, the University will develop new residences at its Mulberry Court and Alsop sites on Brownlow Hill.
The University will also invest in its off-campus accommodation, developing new residences at its Greenbank site at Mossley Hill to provide a self-contained student village including catering and sports facilities.
The teaching environment for science-based subjects is also being transformed with an investment of £25m centralised teaching laboratories.
The university is also planning to invest £32m in teaching facilities in the Faculty of Humanities and Social Sciences, £7.5m in an extension to the Management School and £9m in a refurbishment of its Guild of Students.
Other new developments include new student social space and a £4m investment in sports facilities.