IBM is joining forces with a German research institute to explore the potential of quantum computing, backed by a government plan to invest 650 million euros (717 million U.S. dollars) over two years in wider research in the field.

Berlin's support, sealed at a meeting on Tuesday between Chancellor Angela Merkel and IBM CEO Ginni Rometty, comes as Europe's biggest economy seeks to catch up to the United States and China in a global technology race.

IBM will install a Q System One quantum computer at one of its facilities in Germany, partnering with the Fraunhofer Society – an applied research institute - to build a research unit and community around it.

Quantum computers could operate millions of times faster than today's advanced supercomputers.

The technology is based on quantum bits, or qubits, that can be 'superposed' on each other, exponentially increasing the amount of information that can be processed. IBM's current Q System One machine has 20 qubits.

Read more: IBM says it’s reached milestone in quantum computing

"This effort is poised to be a major catalyst for Europe's innovation landscape and research capabilities," said Martin Jetter, senior vice president and chairman of IBM Europe.

The quantum computer – the first to be deployed by IBM outside the United States – will be shipped to Germany and set up next year. In the meantime, German researchers will gain access to IBM's U.S.-based Q Network research forum.

Building a research community around the project has the potential to create "a unique concentration of skills," Jetter told Reuters, drawing parallels to the origins of Silicon Valley in the United States.

Merkel's government last year said it would make available three billion euros to sponsor the research and development of artificial intelligence by 2025 as it seeks to regain ground in cutting-edge research.