Announcing this, Saturday, Deputy Prime Minister-cum-Education Minister Tan Sri Muhyiddin Yassin said the college would be able to cater for more students seeking vocational and technical skills.
He said the education hub is a suitable area for the new college as it had been equipped with infrastructure.
"Once the new college has been built, the education hub will also be provided with a field, more hostels buildings and other facilities to benefit the students.
"Compared to existing vocational college at about 24 acre at Mile 1Ã here that has a capacity of 126 students at one time," he said, during an official visit to the Sandakan Vocational College.
Also present were Chief Minister Datuk Seri Musa Aman, Education Deputy Minister Datuk Mary Yap Kain Ching, Housing and Local Government Assistant Minister Datuk Zakaria Mohd Edris and other officials.
Muhyiddin said more vocational colleges would be provided in the country in line with the vocational education transformation that has been the main choice for many youths.
Muhyiddin said 126,000 students had applied to enter vocational colleges after he had launched the vocational transformation programme about two years ago.
"As such, I have alerted Tajuddin (Technical and Vocational Education Division Director Datuk Ahmad Tajuddin Jab) when launching the vocational transformation programme at that time, that more would come forward to apply.
"My assumption was correct when I was told 126,000 applied to join vocational colleges, not only as second choice, but also as first choice," he said.
Muhyiddin, who is also Education Minister, said the upgrading move was one way for the Government to boost the standard of living of the people and country by providing more technical-vocational opportunities.
He said it could boost the interest of students to take part in the vocational field as first choice, compared to previously, when it was second choice.
He said the vocational field had a good prospect to meet the need for trained manpower which was increasing due to the economy's expansion.
All sectors of the economy needed many trained manpower, and this also applied in the private sector, noted Muhyiddin.
The Deputy Prime Minister said the capacity of students in vocational colleges was currently limited to meet the increasing demand.
"I have looked at it more closely, and the matter has been discussed in the Cabinet. The Prime Minister gave strong support to increase the capacity of students at vocational colleges," he added.
"Acquiring vocational skills has been a vital field that can be seen as an added value to the human capital market and would give the students the advantage when stepping into the real world.
"I am also optimistic with good cooperation level between agencies that provide vocational skills and private sector as the need for such skill is in high demand among students," he said.
For example, Muhyiddin said almost 40 to 60 per cent students in overseas countries have education qualifications in vocational field while only five to seven per cent Malaysian students are taking up the same field.
Hence, he said the Government decided to retain vocational transformation as it is now not a second choice and proven to generate attractive income to workers.