Durham Photonics, developers of advanced imaging software used in biomedicine and bioscience, was awarded the funding by One NorthEast, according to Materials Handling World Magazine.
The grant will be used to recruit a full-time scientific team, as well as begin feasibility studies for cutting-edge proprietary imaging systems.
Dr Amanda McMurray, managing director at Durham Photonics, told the magazine: "This grant will enable us to further our development through additional research and to recruit new expertise.
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"Outside investment remains imperative if we are to continue to excel in such an innovative field.
The firm, which is a spin-out from the University of Durham, also receives support from the Centre of Excellence for Nano, Micro and Photonic Systems (Cenamps).
Established in June 2007, Durham Photonics developed the first terahertz microscope to reach the market, which will be available later this year and be used in bio and nano-medical processes.
Cenamps, which recently merged with the Centre for Process Innovation, supports research and development activities in the UK's processing sector.
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