Scientists have said it has an 80% chance of success.
Health Secretary Matt Hancock told the government's daily briefing that the Oxford trial and another at Imperial College London would each get at least another £20m of public money.
The Oxford team is starting production before the trial is complete and wants about a million doses ready to be sent out by September.
Mr Hancock said developing a vaccine is an "uncertain science" but that the two teams were making "rapid progress" and would be backed "to the hilt".
He said: "At the same time we'll invest in manufacturing capability so if either of these vaccines safely works then we can make it available for the British people as soon as humanely possible."
However, he cautioned that "nothing about this process is certain".
The Oxford vaccine, called ChAdOx1 nCoV-19, is made from a harmless chimpanzee virus that has been genetically engineered to carry part of coronavirus.
The technique has already been shown to generate strong immune responses in other diseases.
Deals have already been done with three UK manufacturers, and several more abroad, to make the vaccine.
More than 70 experimental vaccines are in development around the world.
Two in the US and one in China have already begun safety studies.