Cambridge has become the first university outside the United States to raise £1 billion in a fundraising campaign.

It was announced today that the funds will be used partly to pay for an increase in bursaries and scholarships for students. Thanks to the donations of more than 45,000 alumni, the amount has been achieved two years ahead of schedule, and does not include more than £250 million extra in pledged bequests.

University Vice-Chancellor Professor Alison Richard welcomed the funding, claiming that it would help to sustain the University’s “international pre-eminence” against better-funded competitors.

She said: “I am profoundly grateful to our alumni and benefactors who are investing in Cambridge’s future. Cambridge is consistently ranked among the top handful of universities in the world and is at the heart of Europe’s most important cluster of innovative enterprises.

“We develop the knowledge that drives economic prosperity and enhances human health and the health of our planet. No less important, we enrich the lives of individuals through literature, history, art, music and drama.”

The campaign was launched in autumn 2005 under the theme of ‘Transforming Tomorrow’, as part of the University’s 800th anniversary celebrations. The money raised will be used to “encourage applicants regardless of their financial circumstances” as well as to fund new buildings for research and student accommodation, and attract “brilliant” new academic staff, it was disclosed.

Professor Richard welcomed the announcement but recognised that fundraising would need to continue to ensure long-term investments in the future of students, collections and faculties.

The campaign will continue when Sir Leszek Borysiewicz takes over from Professor Richard as Vice Chancellor later this year.