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Its wide ranging Strategic Defence Review (SDR) will also see construction of at least six new munitions factories.
The accommodation cash will be spent on urgent repairs, upgrades and new housing development on surplus MOD land.
The additional funding means more than £7bn will be spent across this Parliament on service family accommodation and new build single living accommodation.
Work will be guided by the forthcoming Defence Housing Strategy.
Defence Secretary, John Healey MP said: “For too long, many military families have lived in sub-standard homes, but this government is taking decisive action to fix the dire state of military accommodation and ensure that our heroes and their loved ones live in the homes they deserve.”
Spending plans will see immediate investment in urgent renovation of 1,000 homes in most need of repair.
