The Huntleigh Research Institute will focus on ways that technology can be used to allow elderly people to remain living in their own homes for longer.
The project will be based at Brunel University's Institute for Bio-Engineering and will build on a system already devised by the university.
The Millennium Homes system was developed in Greenwich.
Impact on lives
Ten homes were packed with sensors linked to a base station where the welfare of elderly residents could be monitored unobtrusively.
The long term goal of the institute is to develop technology systems that can improve social and health care for vulnerable people outside of hospital.
Well-known scientist Professor Heinz Wolff will head up the project which he hopes will make a difference to elderly people.
"The launch of our new research institute is an excellent example of how academic research can have a positive impact on peoples' lives," he said.
"Enabling elderly people to stay home for as long as possible is an important goal for modern healthcare," said Bill Jamieson, Business Services Director at Huntleigh Healthcare, which is providing £400,000 to fund the project.
"The new products that we are planning will complement our existing community healthcare systems and services, enabling us to help many more people to stay at home safely," he added.
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