Toowoomba property developer Clive Berghofer will donate $50.1 million to the Queensland Institute of Medical Research (QIMR), which will be renamed in his honour.
It is believed to be the single biggest charitable donation by an Australian.
QIMR director Professor Frank Gannon says he was "stunned" when Mr Berghofer revealed how much he wanted to donate.
Professor Gannon says Mr Berghofer has previously given $10 million to cancer research but this donation far exceeded their dreams.
"I was stunned because of the scale of the generosity - any donation requires generosity - this requires a truly awesome amount of generosity," he said.
"Medical research requires people and equipment and this will allow us to do both those things - to attract and retain and recruit people and also to provide the equipment absolutely necessary for cutting edge research.
"We're at the world leading level of research and we have to retain that position."
'Easy thing to do'
Mr Berghofer, also a former Toowoomba mayor, says he hopes his donation will change people's thoughts about giving to charity.
He says it was an easy thing to do because the QIMR has made in-roads into many diseases including cancer.
"Australians aren't real generous compared to Americans as far as giving is concerned," he said.
"Anybody can have cancer - we don't know who is going to use or not going to use it.
"It could be you, could be me, could be anybody, who's going to get help from Careflight or cancer research or whatever."
Berghofer's generosity 'an emerging trend'
The Australian Centre for Philanthropy Nonprofit Studies (ACPNS) has welcomed the news.
ACPNS spokeswoman Dr Wendy Skaife says Mr Berghofer's generosity is part of an emerging trend.
"A lot of Australians are looking at the role models of say a Tim Fairfax or the Myers family or those wonderful givers like Greg Poche, who has given $40 million to melanoma research down south," she said.
"All of those people who are coming out and saying 'look, we can do a little more individually'."
Dr Skaife says Mr Berghofer's donation will be one of largest in Australia to date.
"We have had the funny situation where our biggest donations have actually come from an American - Chuck Feeney from Atlantic Philanthropies," she said.
"In Queensland, Atlantic Philanthropies has given $102.5 million to the Princess Alexandra Hospital."
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