The department of health said early data from clinical trials around the world showed that the drug could shorten the recovery time of COVID-19 patients by four days.
"This is probably the biggest step forward in the treatment of coronavirus since the crisis began," health minister Matt Hancock told a government news conference.
"These are very early steps, but we are determined to support the science and back the projects that show promise."
The government said the allocation of the drug would be determined by where it would have the greatest benefit, but did not say how many patients would be treated.
The U.S. National Institutes of Health (NIH) said last week that data from its trial of remdesivir showed that the drug offers the most benefit for COVID-19 patients who need extra oxygen but do not require mechanical ventilation.