Headley Court, the armed forced rehabilitation centre near Leatherhead, is set to receive £24m in Government cash.
Defence Secretary Des Browne is expected to confirm the funding today when he visits the site, which cares for injured servicemen and women.
The money will be used to create a bigger accommodation block, a prosthetic limb workshop and a neurological lab.
It will also go towards building an on-site swimming pool and sports complex.
The announcements comes after campaign groups, including Help For Heroes, demanded better care for military men and women, who say a surge in injuries have strained resources.
Help For Heroes founder and ex-Army officer, Bryn Parry, said: "I'm delighted the Government has been able to find these funds for Headley Court to ensure its future as a world-class facility. They will pay for the long identified, essential improvements.
"The last seven months have seen the awakening of a national desire to support our servicemen and women, those heroes who risk their lives on our behalf."
Headley Court currently treats 180 patients, most of whom were hurt fighting in Afghanistan and Iraq. The centre began its work after the Second World War for RAF personnel and became the UK's main military rehabilitation unit for all three armed forces in 1996.
Princes William and Harry visited the facility last month and Prince Harry was reunited with one the serviceman he had shared a flight home from Afghanistan with.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereComments are closed on this article