Speaking in Davos, the Prime Minister said the institute is being backed by IBM, Cisco, Microsoft and a host of universities from across the UK.
The Institute of Coding, which is made up of a consortium of more than 60 universities, businesses and industry experts, hopes to develop the next generation of digital specialists in order to plug the UK's gaping digital skills gap.
Speaking at the World Economic Forum 2018 in Davos, the PM spoke about how the Institute of Coding, a key part of the government’s efforts to drive up digital skills through the Industrial Strategy, will equip people of all ages with the skills they need.
The consortium is formed of businesses including IBM, Cisco, BT and Microsoft, SMEs, 25 universities, and professional bodies such as the British Computer Society and CREST.
The 25 universities involved, led by the University of Bath, range from sector leaders in business and computer science (UCL and Newcastle University) to experts in arts and design (University of the Arts) to specialists in widening participation and outreach (Open University and Birkbeck, University of London).
Universities minister Sam Gyimah said: "A world-class pipeline of digital skills are essential to the UK’s ability to shape our future. By working together, universities, employers and industry leaders can help graduates build the right skills, in fields from cybersecurity to artificial intelligence to industrial design.
"The Institute of Coding will play a central role in this. Employers will have a tangible input to the curriculum, working hand-in-hand with universities to develop specialist skills in areas where they are needed most. As we have outlined in the Industrial Strategy, this is part of our ambition to embrace technological change and give us a more competitive edge in the future."
Dr Rachid Hourizi, director of the Institute of Coding, said: "The strength of the Institute of Coding lies in the fact that it brings together educators, employers and outreach groups to co-develop digital skills education at undergraduate and masters level for learners in universities, at work and in previously under-supported groups across the country.
"In addition, we’ll work with our partners to target underrepresented talent through outreach activities, tailored and inclusive curricula, flexible delivery and removal of barriers to working in the industry."
BT, among others, will provide staff and training for the Institute of Coding’s undergraduate and masters programmes.
Gavin Patterson, BT Group chief executive, said: "Digital skills are crucial to BT’s current and future success, but no company can fix the UK’s digital skills shortage on its own.
"By working together across industry and academia, the Institute of Coding will unlock access to a bigger and more diverse workforce, and support skills development for people at different stages of their careers.
"We are particularly pleased that industry will have the opportunity to build on its work within the Tech Partnership and our existing degree apprenticeship schemes, setting standards and promoting degrees that are aligned to employer needs."
The Prime Minister also spoke about the £10m investment in free and subsidised training courses to help adults retrain and learn new skills.
Launched as part of the Industrial Strategy, the pilot programmes, located in Leeds, Devon and Somerset, Lincolnshire, Stoke-on-Trent and the West Midlands, will test how to reach out and support people with the cost of retraining. The Government has also invested £30m to test the use of artificial intelligence and edtech in online digital skills courses.
The award follows a nationwide competition, run by the Higher Education Funding Council for England (HEFCE), to improve the way universities train people for digital careers.
The government’s £20m investment will be matched by a further £20m from industry, including in-kind contributions such as training and equipment.