In the daytime the view from Cerro Pachon, a rocky, desolate peak high above Chile, offers a breathtaking vista of the Andes. Mountains of rock topped with snow and glaciers seem to touch the heavens.

Come nightfall, the Andes disappear into gloom and then the real show begins. As if someone had flicked a switch, the gleam of millions of planets and stars studs the inky blackness overhead.

The sky seems too immense to absorb, even for giant telescopes. They focus on one tiny portion at a time, pinpricks in the cosmos, because traditionally astronomers like to dwell on detail.

Not any more. Cerro Pachon is to host the Large Synoptic Survey Telescope, a near $400m (£203m) project that will survey the entire sky several times a week - something never done before.

Every 15 seconds it will take an image seven times the diameter of the moon, adding up, every three days, to a full panorama of the heavens. Boasting 3,200 megapixels, it will be the world's biggest digital camera.

"Most telescopes look at a tiny part of the sky, to look deep and in detail. We want to look broadly, to cover everything," Victor Krabbendam, the deputy project manager, said yesterday.

This week the telescope took a step closer to reality after donations from two geeky philanthropic billionaires who are entranced by the technology and its possibilities.

Bill Gates gave $10m from his private fortune and a former Microsoft colleague, Charles Simonyi, gave $20m through his Fund for Arts and Sciences.

Gates, one of the world's richest men, said the telescope would turn astronomy into a software issue by writing code and database queries to mine the night sky and recover its secrets.

"LSST is truly an internet telescope which will put terabytes of data each night into the hands of anyone that wants to explore it. [It is] a shared resource for all humanity - the ultimate network peripheral device to explore the universe," he said.

The donations will keep on track the construction of three large mirrors and three refractive lenses which are the most important and expensive part of the machine.

The first stages of production for the two largest mirrors are under way at the Mirror Laboratory at the University of Arizona.

Launched in 2000, the project is a partnership based in Tucson, Arizona, and split among 23 universities, laboratories and private entities. Once the mirrors are ready they will be hauled up the 2,690-metre peak and installed in a dome due for construction in 2011. "First light", as astronomers call their scoping, should begin four years later.

The camera is expected to take more than 200,000 pictures. Processing that information is expected to be the most technically difficult part of the project.

The camera's 15 second exposure should be long enough to record images of even very faint objects such as asteroids and so-called near-Earth objects. By monitoring them night after night, it should be possible to infer their orbit around the sun and hence how likely they are to slam into Earth.

That is how the project's director sold the LSST to congressmen in November. "The ability to detect virtually every potentially hazardous near-Earth object and determine its orbit with precision transforms that statistical threat into a deterministic prediction," said Anthony Tyson, at the University of California, Davis.

But it will also be useful for basic science. Its time-lapse images can be used to create 3D maps of the mass distribution in the universe. That should not only help to trace billions of galaxies, but also tell cosmologists more about the mysterious and recently discovered "dark energy" that is driving the expansion of the universe.

Every night the telescope will pull in 30 terabytes of image data (about 190 times more than a top of the range iPod) which will be made available free on the internet. "People can find out what's going on everywhere in the sky, and no one has ever done that before - not even come close," said Donald Sweeney, the project manager. "There are lots of things that happen every night in the sky, and no one has been able to track them and detect them."

Cerro Pachon, located in northern Chile near the city of Vicuña, is a foothill of the Andes but high enough to escape haze and light pollution. It was chosen over a site in Mexico because it hosts two other large telescopes known as Gemini South and SOAR, delivering a ready-made astronomy infrastructure.

"It's very beautiful up there, very rocky and quiet. You can see glaciers in the distance," Krabbendam said.

This week's donations would keep the project on schedule by enabling the early fabrication of large optics and other long-lead components of the telescope system, Sweeney said.

When working together at Microsoft, Gates and Simonyi became fascinated with stretching software and the internet's possibilities. Simonyi, estimated to be worth $1bn, is also obsessed by space. Last year be became the fifth space tourist and the second Hungarian in space.

"There is a similarity between the telescope and these two guys," said Suzanne Jacoby, a project spokesperson. "It's very innovative and the technology is very cool. It appeals to technologically minded people."

Other eyes on sky

· The European Southern Observatory's Very Large Telescope in Chile's Atacama desert has produced the first direct images of planets outside our solar system.

· At $1bn the Atacama Large Millimetre Array in Chile will be the world's most expensive observatory. By 2012 it is expected to discover a new galaxy every three minutes.

· The southern hemisphere's biggest optical eye is the Southern African Large Telescope in the Karoo desert.

· The proposed Square Kilometre Array (SKA) will be 100 times more powerful than any other instrument. Construction is due in 2011, with South Africa and Australia competing to be hosts.