The Government has given the college £16.8 million to build its Institute of Technology off Castle Hill.
The building is set to open to students in September 2021 – with more than 2,000 learners set to be taught at the institute by 2025.
It will focus on apprenticeships and offer courses in advanced manufacturing, modern construction methodologies and medical engineering.
Education and council bosses say the facility will boost to the region's economy.
Work to build the site began in October. Construction was delayed by six weeks due to the pandemic but crews have since returned on site.
Neil Thomas, principal and chief executive of Dudley College of Technology, one of the anchor partners behind the Black Country and Marches Institute of Technology (IoT) confirmed that work on the development would continue through the second lockdown.
He added: "The development of the £32.5million pound facility will continue to progress despite new national Covid measures.
"The contractors Speller Metcalfe are adapting some of their health and safety practices in line with government guidance but this won't stop work – as there is a huge appetite from all concerned, to keep the project on schedule.
"Opening the doors of this landmark new facility, which will create opportunities for both young people and adults, is something we can all look forward to next year."
The institute is being built on a 4,750sq m plot on Castle Hill by the planned new Metro stop, the Very Light Rail Innovation Centre and the Black Country Living Museum.
The project will cost £32.5 million, with the Government stumping up £16.8 million.
Dudley College was one of a number of college's to bid for cash as part of a £170m Government funding pot for new skills institutions.