The money will be spent by the council on services for residents that will make the quality of living in the city better. Glasgow beat 30 other UK cities to the prize.
Projects on the table include real-time traffic information, apps to check when buses and trains are arriving, and a pothole reporting service. Facial analysis for the city's CCTV network and energy use monitoring to make electricity and gas delivery more efficient are also mooted.
"Glasgow has some quite extreme challenges - it has the lowest life expectancy of any city in the UK for instance - and the hope is that if we bring together energy, transport, public safety and health it will make it more efficient and a better place to live," Scott Cain, the TSB's project leader for Future Cities, told the BBC.
All of the data produced by the projects will be publicly available so other cities can benefit from it too.
"From transport systems to energy use and health, this demonstrator will play a key part in the government's industrial strategy and give real insight into how our cities can be shaped in the future," said Science and Universities minister David Willetts.
This is a welcomed new strategy for Glasgow that will hopefully radically improve its transport system and create a new efficient system for the future. It is seen the new strategy will bring social and economic benefits, however it will also bring added benefits to Glasgow's environment, and improve air pollution due to a poor transport system.