The government will provide an extra £85m in both 2014-15 and 2015-16 for the extra grants.
“To make sure we give young people the skills they need to get good jobs in this modern world, we’ve doubled the number of apprenticeships and I will extend the grants for smaller businesses to support over 100,000 more,” said the chancellor.
“And we’ll now develop new degree level apprenticeships too.”
The government also said it would triple the number of scholarships for students from developing countries next year and will provide £20m over two years to support degree and masters level apprenticeships.
It will provide a £100,000 grant to the Lockerbie-Syracuse Trust charity, a scholarship fund which was set up following the 1988 Lockerbie bombing.
The scheme allows students from Lockerbie to attend Syracuse University in the US.