The laboratory which created the world's first cloned sheep is joining forces with a Scottish university in a new multi- million-pound partnership, it was announced today.

The link between the Roslin Institute and Edinburgh University's Royal (Dick) School of Veterinary Studies will bring nearly £100m of investment.

It will see the institute double its workforce to 500 and move to a new £58.5m headquarters in Easter Bush, Midlothian, in 2010.

The centre will receive £40m in funding from the Biological Biotechnology and Biological Sciences Research Council over the next five years.

Academics say the move, which will bring the new institute under the auspices of the University's College of Medicine and Veterinary Medicine, will help to further Scotland's reputation as a world leader in animal science research.

Professor David Hume, director of the Roslin Institute, said: "The pooling of resources and expertise between Roslin and the university will provide a significant boost to the work of the institute and herald the start of a period of expansion, with research that has implications for both human and veterinary clinical medicine.

"It will further cement the position of Scotland as the world's leading centre of animal sciences research."

Professor Sir Timothy O'Shea, principal and vice-chancellor of the University of Edinburgh, said: "The coming together of the Roslin Institute and the University of Edinburgh is a great step forward.

"Both organisations are renowned internationally for their research and such a union will only serve to enhance and build on that."

The Roslin Institute, which was established in 1993 and created Dolly the sheep three years later, conducts research into preventing and treating different animal diseases caused by prions (such as BSE), viruses and bacteria.

Its work has implications for human health, including investigating food safety issues and understanding the genetic mechanisms of health and disease in animals, which can in turn enhance human medicine.

The creation of Dolly, who was the first mammal ever to be cloned, focused international attention on the institute. It was followed a year later by the creation of two more sheep - Polly and Molly - who were also cloned, each containing human genes.

The doubling of staff numbers will create around 10 more research groups with the veterinary school contributing 18 group leaders and their research teams for the new facility.

Rhona Allison, senior director of Life Sciences at Scottish Enterprise, said: "This is a major development which will help the University of Edinburgh and the Roslin Institute capitalise on each other's world-class academic research strengths and expertise to secure major new investment and generate employment opportunities. It will strengthen Scotland's overall life sciences offering, which continues to be recognised as one of the strongest in Europe."