Retired financial services magnate Barry Lambert has given the the University of Sydney $33.7 million – its biggest ever donation for research – to develop pharmaceutical drugs from cannabis plants.

"The experience of our granddaughter, who suffers from debilitating epilepsy, has opened our eyes to the extraordinary possibility of cannabinoids treating not only her condition but a range of chronic illnesses that often don't respond to conventional treatments," said Mr Lambert, who, together with his wife Joy, has funded the university's effort to use cannabis compounds to treat a wide range of diseases.

University of Sydney vice-chancellor Michael Spence said the gift would put the university in the front ranks of world research into the medicinal properties of cannabis and allow it to explore a wide range of uses, including treatments for addiction, cancer, obesity, childhood epilepsy, chronic pain, dementia and mental health disorders.

Barry Lambert, who made $373 million when he sold Count Financial to CBA in 2011, says he and his wife's vision is to make Australia a world leader in researching the medicinal potential of cannabis. Louie Douvis

"It places Australia in the front rank of countries, such as the Netherlands, the United States and Israel, leading the world in this new era of cannabinoid science," Dr Spence said.

Mr Lambert, a BRW Rich-lister with a worth of $372 million, made his fortune in financial planning. He founded Count Financial in 1980 after starting his career, aged 17, at Commonwealth Bank's Taree branch in rural NSW.