The state will invest $550 million in biotechnology businesses through improvements to laboratories in tax-free zones, tax credits for investors and research grants, Gov. Andrew M. Cuomo announced Monday.

The initiative comes a year after Long Island leaders designated biotech as the local industry most in need of state support because of the potential to create high-paying jobs.

Cuomo said the state funds would be matched by at least $100 million from the private sector.

Kevin Law, president of the Long Island Association business group, said developing products from the inventions of Cold Spring Harbor Laboratory, Stony Brook University and other research institutions “will get a big lift from the governor’s initiatives, which should lead to more clean, high-paying jobs for our region.”

The program calls for $250 million in state tax credits to keep businesses in the state and to attract others. New companies would receive a 15 percent refundable tax credit on research and development spending; those with fewer than 100 employees would be eligible for a 20 percent tax credit.

Venture capitalists would receive a state tax credit of 25 percent of their investment in biotech firms, with a maximum of $250,000 per investor.

The state also will spend $200 million over 10 years on equipment and other capital expenditures for biotech businesses located in Start-Up NY tax-free zones. Officials said an undetermined amount will be spent at facilities on five local college campuses, including Farmingdale State College’s Broad Hollow Bioscience Park and Stony Brook’s Long Island High Technology Incubator.

advertisement | advertise on newsday

Biotech represents nearly half of the 23 Start-Up NY participants in Nassau and Suffolk counties.

They include Guided Interventions Inc., which is developing a wire-based medical device that could reduce the use of stents to open blocked arteries and the painful, sometimes dangerous side effects of heart surgery, and AJES Life Sciences, a provider of preclinical and toxicology testing for drug developers.

Cuomo said biotech startups would vie for at least $200 million in state and private-sector grants in a statewide competition. Grants of $25,000 each would be awarded every 13 weeks, with the winners then competing for one of five $100,000 grants to be given out at an annual Life Sciences Summit.

Universities, both public and private, will endeavor to place students and recent graduates in internships at biotech businesses.

James Simons, a Stony Brook mathematician who started the Setauket-based hedge fund Renaissance Technologies, praised the initiative, saying, “this type of funding will have a positive impact both on our economy and our ability to drive scientific innovation.”

Kathryn Wylde, president of the Partnership for New York City business group, said the state program would create more than 25,000 jobs and spur $3 billion in economic activity that puts the state “on a par with California and Massachusetts as the nation’s premiere centers of commercial life sciences.”