Alan Turing Institute to be based at the British Library
The institute was first announced by chancellor George Osborne during the Budget in March, with its London location confirmed during his autumn statement on Wednesday.
The centre will receive £8.4 million in government funding every year over the next five years and will focus on new ways of collecting, organising and analysing large sets of data, known as big data.
It is dedicated to British mathematician and computer science pioneer Alan Turing (pictured), who helped crack German codes during World War Two.
The institute will be run by a joint venture partnership made up of the universities across the UK selected through a competition run by the Engineering and Physical Sciences Research Council (EPSRC), which is leading work to set up the centre.
Over 20 universities have already applied to be part of the institute and winners of the competition are due to be announced shortly.
The centre will also partner with businesses to "ensure the entire country benefits", HM Treasury said.
The government said it hopes the centre will strengthen "Britain's expertise in the analysis and application of big data - a rapidly moving, globally competitive area".
The institute will be part of the new 'Knowledge Quarter', a collaborative group of 35 academic, cultural, scientific and media organisations based in Kings Cross, Euston and Bloomsbury. Members include the British Museum, the University of London, The Guardian and the Wellcome Trust.
Chancellor George Osborne said: "The institute will bring benefits to the whole country through partnerships with universities and businesses across Britain, including in our great northern cities, to better understand and exploit the amazing opportunities presented by big data.
"It's a fitting tribute to Alan Turing - the father of modern computer science and a national hero - and will ensure Britain continues to lead the whole world in this important field."
Professor Philip Nelson, EPSRC chief executive, said: "Big data has the potential to propel huge advances in areas as diverse as healthcare, manufacturing, aerospace and cyber security. Ensuring the UK leads the world in this exciting field is paramount.
"The Alan Turing Institute will form an important part of the UK's big data capability, complementing EPSRC's significant portfolio of computer science, ICT and mathematics research and training."