The Victorian government is pressing ahead with plans for a new “hi-tech precinct” in the Latrobe Valley, signing a memorandum of understanding (MoU) with key development partners.

The precinct was part of a $40 million initiative announced in this year’s state budget to “diversify the local economy in the Latrobe Valley”.

It will be based at the Federation Training campus in Morwell, and receive up to $17 million in state funding. Federation Training was created in 2014 from the amalgam of Advance TAFE and GippsTAFE.

“[The hi-tech precinct] will bring together the new Morwell Tech School with Federation University, Federation Training, private tenants, and leading global tech firm Fujitsu as the likely anchor tenant,” the state government said this week.

“The MoU provides a framework for the development of the precinct, the establishment of Fujitsu jobs and an Open Innovation Concept to be integrated into the Precinct and the Morwell Tech School.”

The four parties to the MoU are Fujitsu, the Victorian Government, Federation Training and Federation University.

Fujitsu said it has “flagged for discussion” the establishment of an “open innovation laboratory” in the precinct where “Gippsland’s research, business and education communities can access Fujitsu’s computing and data analytics capabilities – the first time this ground breaking approach has been implemented in Australia.”

The lab community could be asked to “opt in to share and cross-pollinate” research and raw data with the goal of furthering “the collective efforts of the region” to establish itself on the world innovation stage.

More practically for Fujitsu, the site could play host to high-performance computers (HPCs), a data centre and to IT service centre facilities, creating up to 80 new jobs if the company agrees to become the precinct’s commercial anchor tenant.

“Further progression of the partnership will now depend on a business case, which will be presented in May 2017,” a Fujitsu Australia spokesperson said in a statement.

The Victorian government was confident in the need for the precinct. It believes that co-locating education and industry could provide simultaneous access to “further study or training” while students also gain hands-on experience.

“This hi-tech precinct will link industry with students, creating more jobs where they’re needed most,” Premier Daniel Andrews said.

Added Minister for Training and Skills Gayle Tierney, “we’re working to make sure students in the Latrobe Valley have access to training at this precinct that aligns with the needs of local industry now and in the future.”

The government said the precinct would ultimately promote innovation, productivity and job creation “with a focus on growing sectors in Gippsland such as new energy, health, food and fibre and professional services.”

While creating an initial 80 positions, the government believed a successful precinct – presumably with more commercial anchor tenants – had the potential to create “hundreds” of full-time jobs in the region in future.