Satellites could be launched from the UK in as little as three years, heralding the start of what the government called the "Great British Space Age".
A traditional "vertical" rocket launch pad will be built in Sutherland, on the north coast of Scotland, to put small satellites into orbit.
New "horizontal" launch sites – where runways are used by space planes carrying satellites and tourists – are also planned in Cornwall, Glasgow and North Wales.
The spaceports could be worth £3.8bn to the UK economy over the next decade, according to the UK Space Agency.
Business Secretary Greg Clark told Sky News the plan would "put us ahead of the competition and allow what's already a successful industry to continue to expand".
When asked if the money for the spaceports could be better spent elsewhere, he replied: "Everyone knows the applications of satellites are increasing exponentially, so for us to be leading the world in the development of that technology is a way we can make our economy prosperous in the future.
"We've already got a great reputation and we're building on that. It's really good news for everyone right across the United Kingdom."
Highlands and Islands Enterprise (HIE) is expected to be given £2.5m from the UK government to develop the spaceport in Sutherland.
The site on the A'Mhoine peninsula, between Tongue and Durness, is believed to be the best place in the UK for vertical rocket launches.
It is expected to create hundreds of jobs.
But the plans are set to attract opposition as access roads to the launchpad would likely have to be built across what is designated a national scenic area.
A further £2m funding will boost development of horizontal spaceports across Britain, subject to a successful business case, at Newquay airport, Glasgow Prestwick airport and at a site in Snowdonia.
In a partnership due to be signed at the Farnborough International Airshow Richard Branson's Virgin Orbit is seeking to begin launches from Newquay by 2021, using a modified Boeing 747-400 aircraft called "Cosmic Girl".
Cosmic Girl will carry a LauncherOne rocket under its wing to a launch range over the Atlantic and release the rocket at around 35,000 feet for onward flight into space, carrying a satellite into Earth orbit.
UK-based rocket builder Orbex has already announced £30m in public and private funding for the development of orbital space launch systems and is set to launch rockets from the Sutherland spaceport when it is ready.
Low cost access to space is important for the UK's thriving space sector, which builds more small satellites than any other country. Glasgow builds more than any other city in Europe.
But companies currently have to transport their hardware to countries such as the US, Russia or India to be launched.
Earlier this year Sky News was given rare access to Spire Global, a Glasgow-based company that makes satellites the size of a loaf of bread.
Peter Platzer, Spire's CEO, said: "A spaceport in Scotland and the UK is fantastic news!
More from United Kingdom
"Launch continues to be the most unpredictable part of the overall supply chain, with delays, often for months and sometimes years, being the norm.
"In Spire, Scotland already sports Europe's most advanced and prolific satellite manufacturing capability, and with a spaceport right next door, enabling clockwork-like launches, we can finally get our space sector supply chain to be truly integrated."