It's to meet its legal targets for helping tackle climate change.
The funding will cover programmes in the energy, transport, agriculture and waste sectors under the Clean Growth Strategy.
As a part of the funding around 900 million pounds will be spent on innovation.
This includes 265 million pounds for smart energy, 460 million pounds to support new nuclear technology and 177 million pounds to help develop new technology to further reduce the cost of renewables such as innovations in turbine blades for wind power.
It will also invest up to 100 million pounds in technology to capture, use and store carbon dioxide emissions and in industrial innovations to drive down emissions.
In July the government said it would ban the sale of new petrol and diesel cars and vans from 2040 and on Thursday said it would spend 1 billion pounds to promote low-emission vehicles, including helping consumers to pay for new cars.
Britain has a legally binding target to cut greenhouse gas (GHG) emissions, blamed for global warming, by 80 percent by 2050 compared with 1990 levels.
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