The scheme will see an extensive refurbishment and redevelopment of the existing facilities and the construction of a new sports complex.
The £31.7m project includes a new indoor cricket hall, a 12 court multi-use sports hall, a martial arts dojo, a fitness suite and high-performance weights rooms.
Galliford Try is already working with University, building a £40m Centre for Teaching and Learning at the Lower Mountjoy site.
Cliff Wheatley, Managing Director for Galliford Try North East and Yorkshire, said: “We are delighted to be furthering our relationship with Durham University with this exciting new project.”
Durham University’s Pro-Vice-Chancellor (Colleges and Student Experience), Owen Adams, said: “These exciting new facilities at Maiden Castle will leave us perfectly placed to reinforce our position as one of the very top sporting universities in the UK.
“We believe in the extraordinary power of sport and physical activity to bring together people of all backgrounds and abilities – whether they are students, staff, or members of the community.
“Our existing Maiden Castle centre is already very popular with local residents and all of the new facilities will be accessible to the local community on a daily basis. We think this development can be transformative for sport in the city and the surrounding area.”