The money would be spent over the next two years in addition to a similar amount already committed, the government said.
"Britain should be the world's number one centre for genetic and stem cell research, building on our world-leading regulatory regime in this area," Treasury chief Gordon Brown said.
Britain is already considered a world leader in the field of stem cell research, which many scientists believe may lead to new treatments for a range of diseases.
More funding needed
Despite the extra funds, a government commissioned report has called for more.
It wants funding to rise by between 350 million pounds ($A818 million) and 520 million pounds ($A1.22 billion), over the next decade.
"It is vital that we maintain and increase the level of public funding," said Sir John Pattison, who chaired the committee.
"The ultimate health and wealth gains the UK will enjoy are directly proportional to the additional investment we are proposing."
Without committing exact figures, the government said it welcomed and accepted the report's recommendations.
"It is important we continue our long-term commitment to stem cells," Health Minister Jane Kennedy said.
"They have the potential to help millions of people and could lead to new treatments for serious diseases for which there is currently no cure," he added.
The committee's proposals also include setting up a government-backed consortium of pharmaceutical, health care and biotechnology companies to investigate the medical potential of stem cell technology.
Mr Brown said he was acting on another of its recommendations, establishing a public-private partnership to invest in the research at a "pre-commercial" stage.
Stem cells are the body's master cells, appearing when embryos are just a few days old and developing into every type of cell and tissue in the body.
Scientists hope to harness the regenerative power of those cells to repair damage from spinal cord injuries, diabetes, Parkinson's and other diseases.