Virtual and augmented (VAR) technology is in the early stages of being adopted as a teaching platform in higher education. The technology can facilitate immersive learning in environments that are not usually physically accessible to students via 3D models and interactive 360° videos. To date, adoption rates of VAR technology for teaching have not been well described across a higher education institution. Further, there is an absence of information on the optimal VAR laboratory designs and cost per student. In this study, a purpose designed virtual reality laboratory was formed in 2017 at The University of Sydney, housing 26 Oculus Rift headset units. An evaluation was conducted on the design, costs, rates of teaching adoption and student experiences over five teaching periods (2.5 years). Over this period, 4833 students were taught in the laboratory across 7952 student visits. The laboratory was used most by the Faculty of Engineering (53%), followed by the Faculty of Arts & Social Science (23.8%) and Faculty of Science (23.2%). For engineering, the units of study using the laboratory represented only 1.4% of annual faculty subjects offered. This confirms that adoption was in the initial stage of innovation diffusion. The laboratory saw a 250% increase in student numbers over the period of evaluation and 71.5% of students surveyed (n = 295) reported enhanced learning outcomes. The cost per visit was only AU$ 19.50. These findings give confidence to higher education institutions that the right VAR technology infrastructure is a sound educational investment for the future.