A total of £1.5 million to help universities develop new strategies and business models to cope with the financial downturn has been distributed by funding chiefs.
The Leading Transformational Change fund was established by the Higher Education Funding Council for England to encourage universities to share ideas about how to cope with economic constraints.
Seven collaborative projects have been chosen from those put forward last year, several of which focus on developing closer relationships with private-sector partners.
The pair, which share expertise in disciplines including education and healthcare, will use the new funding to work together on research and engagement projects.
Keith Burnett, vice-chancellor of Sheffield, said collaboration has led to "extra income for both of our universities - we're more sustainable and more powerful".
His counterpart at Sheffield Hallam, Philip Jones, added that the joint work on education projects will have an impact on the city of Sheffield as educational standards rise. This should have a knock-on effect of boosting local university enrolments, he said.
Also winning funding was a project at the universities of Leeds and Bristol to promote "wellbeing initiatives" for staff, which could include occupational counselling and reflexology.
Steve Egan, Hefce's deputy chief executive and director of finance, said projects had been chosen that would help universities "find their own solutions" to the challenging economic climate and allow them to continue making a contribution to society despite the recession.
Other beneficiaries include the Central School of Speech and Drama, which secured funding to work with the Roundhouse and Hampstead Theatre on joint productions, and the University of London, which received money for a new Centre for Creative Collaboration.
Oxford Brookes University is working with the universities of Bradford and Bournemouth to learn lessons from the private sector about how to remain competitive in a tough market, while the universities of Plymouth and Teesside are working together on business engagement.