An agreement for the project has been signed in Noumea by New Caledonia's president Philippe Germain and the visiting Vanuatu Prime Minister Charlot Salwai.
According to New Caledonia's public broadcaster, the French Development Agency will fund 60 percent of the construction costs and New Caledonia's government will contribute a further 24 percent.
The signing in Noumea has cleared the release of just over $US1.4 million for the project, which is expected to be completed for opening in 2020.
The report said the new national university will also help train ni-Vanuatu students to work in the tourism sector.
Photo source Vanuatu Government