Covering 400 square metres, the Construction Innovation Centre at the Wellington Road site will include two purpose-built mezzanine areas housing new electrical and plumbing workshops.
The work will also incorporate refurbished training areas for students doing qualifications in gas, painting and decorating.
Work on the centre is being carried out by Wolverhampton-based construction company Interclass Plc.
Councillor Linda Leach, the council’s cabinet member for adults, said: “This is fantastic news for the people of Bilston and Wolverhampton. Students will also be able to learn new skills in engineering and motor vehicle studies, focusing on new electric and hybrid vehicles – including training in MOTs.
“The centre will provide a lot of people with greater opportunities to gain apprenticeships and employment within the city.
“It will also include adult education facilities and teach new specialist skills, enhancing learning and securing jobs for people. I’m really pleased to see this going forward.”
Each new area will be equipped with industry-standard tools and equipment so that students will be able to gain experience of using the same kit as they will in the workplace.
Interclass is also offering work placements to students in order for them to gain hands-on experience through helping with the build.
Two additional classrooms equipped with hybrid learning technology are also being built, to provide interactive teaching to students who able unable to attend sessions in person.
College principal Malcolm Cowgill said: “The college has ambitious plans to transform the student environment and the extension to the construction centre will provide first class training facilities in key trade areas, enabling people from Wolverhampton and beyond to gain the skills and knowledge required by employers in the industry.”
The extension is being developed with funds from the Department of Education’s Post-16 Capacity Fund. It is due to open for the start of the 2022/23 academic year in September.
At present, the college has around 10,000 students as well as over 600 apprentices working for employers across the Black Country and beyond.