The changes in the manufacturing will happen ever faster. Sustainable and customised manufacturing are the main key words to characterize nowadays manufacturing. On the 7th of April 2013 A. Merkel has declared about the beginning of a new industrial revolution – Industry 4.0. It was caused by the new paradigm of the industry, what is connected with increased automation, more flexibility, adaptive control, autonomous decision making process, etc. The industry is entering into Cyber-Physical Systems (CPS) and Internet of Things. It is clear that the digital factory, virtual factory, smart factory is not possible to set up in the laboratories of educational institutions. Also the new solutions, equipment, IT systems would be developed and introduced into the industry ever faster. The educational system must follow this using new possibilities and methods of learning. As the paradigm of the industry has changed, there is a need to change the paradigm of teaching as well. So the virtual and real, the possibilities of internet, e-learning, work-place based learning, the best practices from different countries, the best coursed development methodologies etc. should be integrated as much as possible. Development and piloting of the methodology for modern learning and principles for competence and cooperation network in the field of mechatronics is the main objective of the project. The project helps partner educational institutions to become aware and implement new teaching methodologies that would meet the needs of today’s youth and allow them quickly and easily acquire knowledge that is needed in today’s industry. Also the project helps to create base to cooperation network which enables to make cooperation in designing courses and adapting new teaching methodologies and change information and knowledge. The project results are possible to broaden outside the project partners group, too. For achieving the project’s objectives, 5 main activity fields which are tightly connected are planned to realize: 1) Analysis about new needs in the industry and needed competences in the field of mechatronics today and in the future up to year 2020. 2) Analysis about new teaching didactics – new teaching methods and possibilities for implementing them to teaching process and composing respective methodological material. 3) Developing pilot lecture materials using obtained knowledge about new teaching methods and conducting respective open pilot lecture in each participating educational institution. 4) Analysis and methodology for conceptual design for development and execution of cooperation between industry and education. 5) Creating structure and concept for cooperation and competence network between regions for sharing competences and resources for securing higher efficiency and transparency. These main activity fields are contributed by supporting activities as project management, project homepage compilation and composing project dissemination plan. All previously mentioned activity fields will result in clear and measurable outputs which are described in the project application. The developed and described methodologies and concepts are piloted in the project for obtaining proof of concept. All described activity fields are tightly integrated to each other. Target groups of the project are vocational education institutions, their students, teachers and other staff, companies of mechatronics field, qualification authorities and other industry associations. The aim is to change teaching process more open, interesting and attractive, to make difficult technical subjects more easily understandable and available. Therefore students will obtain competences that the industry needs and become more competitive in labour market, companies have workforce in the future that has competences they need and as labour force is one of the most important resources of the company, the competitiveness of the companies and therefore the industries will increase. Also through improves teaching process increases competitiveness of the educational institutions and their revenues. Project consortium is composed of 5 partners – 3 educational institutions from Estonia, Latvia and Finland and 2 competence centres from Estonia and Finland providing with the information about the industry needs and through their consortiums bringing the industry closer to education process. All partners have previous experiences with projects, including EU projects and are very interested of promoting vocational education.