Hedge-fund billionaire John Paulson is donating $400 million to Harvard University, the school said Wednesday, the largest gift in its 379-year history and among the biggest ever to a U.S. university.

The money will be used to endow the School of Engineering and Applied Sciences, which will be renamed after Mr. Paulson, and will help build a new campus Harvard is developing in the Boston neighborhood of Allston, across the Charles River from the school’s hub in Cambridge.

“The education here opened up a lot of doors for me,” said the 59-year-old Mr. Paulson, who graduated from Harvard Business School in 1980. He described the donation as an effort to “ensure that Harvard, Allston and Boston and the East Coast will be a center for technological innovation.”

The gift could bolster Harvard in a battle for top students in areas like computer science and engineering at a time when Stanford University has been making strong gains in its endowment and prestige, partly as a result of its proximity to Silicon Valley.

This “extraordinary gift will enable the growth and ensure the strength of engineering and applied sciences at Harvard for the benefit of generations to come,” Harvard President Drew Gilpin Faust said in a statement.