Industry partners include Dairymaster, Devenish Nutrition, FBD, Glanbia, Munster Cattle Breeding Group, Progressive Genetics, and the Irish Holstein Friesian Association.
Agriculture Minister Simon Coveney said: “UCD plays a critical role in the Irish agri-food sector and this project builds on a range of innovative programmes already in place.
"I would like to congratulate UCD and many of the most progressive dairy organisations in Ireland on this strategic partnership.”
The dairy enterprise will now have increased capacity for 200 cows.
The herd will be comprised of spring calving and autumn calving groups and the research emphasis will initially be on maximising the potential for milk production from grass, while also investigating the economic potential for concentrate supplementation at different milk price levels.
UCD president Andrew Deeks said: “UCD has always been at the forefront of supporting Ireland’s vital agri-food sector.
"This development will continue this role as we train the future leaders of the sector.”