The Percy Hedley Foundation, based in Newcastle, works with children and adults with cerebral palsy and communication, learning and therapeutic needs. It currently runs two specialist schools, a post-16 education unit and a further education college, as well as residential accommodation.
The cash from voluntary organisation fund Futurebuilders England will be used to upgrade and extend residential units and build seven new ones for people with physical disabilities.
The money will also be used to put high-tech facilities in the housing to help people live independently.
Jonathan Lewis, chief executive of Futurebuilders England, said: "The investment will help the Percy Hedley Foundation create modern facilities for their service users and help them win further public service contracts, and we hope to invest in similar organisations in the near future."
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