A new £45m medical school is to be built in St Andrews which will lead research in areas such as cancer, health psychology and infections.
The new medical school is expected to be a scientific leader
It will be one of the first in the UK to bring together university science faculties and training of new doctors.
The development will also benefit from an £8m donation from a charitable foundation in Malaysia.
It will be named after Dr BC Sekharan, considered the father of Malaysia's rubber and palm oil industries.
His son, Datuk Vinod Sekhar, said: "This agreement with St Andrews is hugely significant for several reasons.
"Firstly, the naming of St Andrews' new medical and science facility after my late father is a fitting tribute to a man who devoted his life to the service of his country and played a significant role in making Malaysia and the rest of the world a better place.
"Secondly, it will give some of the best young brains in Asia the chance to further their potential by attending one of the most respected universities in the world.
"And thirdly, the foundation and St Andrews are committed to forging a new academic bridge between Scotland and Malaysia for the benefit of both countries."
Medical students studying at the new St Andrews complex will graduate with a BSc Honours in Medicine before going on to complete their clinical training in Edinburgh, Dundee, Aberdeen, Glasgow and Manchester.
It will be among the first medical schools in Britain to be fully integrated with other sciences and key university disciplines.
There are plans to expand leading edge medical research, including physicists and doctors working together using laser technology to develop new ways of identifying and attacking cancer cells.
Doctors will collaborate with biologists to develop viral remedies for cancers and potential population pandemics such as avian flu.
Psychologists and doctors will also be researching the psycho-social aspects of illness and medical consultation.
Dr Brian Lang, principal and vice-chancellor of the University of St Andrews said: "This is a very significant development for St Andrews and for life sciences research in Scotland.
"We are determined that this should be a fully integrated centre for medicine and the sciences which fosters true interdisciplinary collaboration".
Construction is due to start on the site later this year, with the first students being admitted in 2010.