Peterborough City Council will also be contributing around £500,000 towards the cost of the new school building, which will allow West Town Primary Academy to relocate and expand from its existing site on Williamson Avenue to Thorpe Road.
Building work will begin in the autumn and it is hoped the new buildings will open in September 2016.
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Councillor John Holdich, deputy leader of the council and cabinet member for education, skills and university, said: "It is fantastic news that the government has committed to providing £6 million towards the new replacement school building for West Town Primary Academy. This is money that we would have to have found to create additional places in this part of the city, so the funding is very gratefully received.
"The existing West Town Primary Academy site has become very cramped and the school is currently at capacity. The new replacement buildings will offer existing pupils and many more besides the chance to learn in modern classrooms with the best facilities that we can offer.
"The new school building will also form a key part of the re-development of the former hospital site, which will offer much-needed housing close to our city centre."
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