UPDATED: June 4, 2015, at 9:54 a.m.

Hedge fund magnate John A. Paulson has pledged $400 million to Harvard’s School of Engineering and Applied Sciences, breaking a record to become the largest gift in the University's history, and retitled the school in his namesake.

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The gift will establish a permanent endowment for SEAS—which will now be known as the Harvard John A. Paulson School of Engineering and Applied Sciences—as the school prepares to move into new facilities in Allston, Harvard announced on Wednesday. Paulson is a 1980 graduate of Harvard Business School. Today his company, Paulson and Co., has more than $19 billion under management.

On Wednesday afternoon, administrators, faculty members, and students gathered in the Northwest Building for a ceremony, when University President Drew G. Faust formally announced the gift, which she called “an extraordinary act of philanthropy.”

Paulson said he began discussions about his gift, which is unrestricted, with Harvard Business School Dean Nitin Nohria and Faust two years ago. In explaining his decision to donate to SEAS instead of other Harvard schools, Paulson said University administrators have identified SEAS and Allston as priorities for development.

“In meeting with Dean Nohria and President Faust, it was clear that a major priority for Harvard was to establish the School of Engineering and Applied Sciences at Allston as the next center for technological innovation,” Paulson said.

Paulson’s pledge continues a strong run of top-level fundraising at SEAS. Last November, former Microsoft chief executive officer Steven A. Ballmer ’77, a former Crimson business editor, donated an estimated $60 million to increase the size of the Computer Science faculty by 50 percent. SEAS is also in the midst of a leadership transition: Francis J. Doyle III, a professor at the University of California Santa Barbara, will take the reins at the school in August in a deanship that will also be renamed in Paulson’s honor.

The gift also propels the Harvard Campaign, the University-wide fundraising drive with a stated goal of $6.5 billion, well past $5 billion. The campaign launched publicly in September 2013 after taking in $2.8 billion in gifts and pledges during its quiet phase. By early this year, it had reached $5 billion.

Higher education fundraising initiatives are often designed to beat their initial public goals. Harvard’s goal, $6.5 billion, would be a higher education record if raised.

The gift signals Harvard’s continued willingness to trade naming rights for philanthropy. While the University has its roots in this practice, having taken the name of benefactor John Harvard in the 17th century, it did not rename one of its schools in exchange for money again until after last September, when Gerald L. Chan pledged $350 million to rename the School of Public Health.

Since the Chan gift, Harvard has also renamed two high-profile and visible deanships. Shortly after Chan’s pledge, the University retitled the Faculty of Arts and Sciences deanship in honor of a donation from Paul B. Edgerley and Sandra M. Edgerley ’84. And last week, administrators announced that the Harvard College deanship would be renamed in recognition of support from Ami K. Danoff ’84 and William A. Danoff ’82.

When asked whether Paulson’s gift will prompt administrators to consider revising the capital campaign’s target, Faust said administrators and the Harvard Corporation will have conversations this summer to review the campaign’s progress and goals.

“There are some part of the campaign that have done better better than others,” she said in an interview. “We will be reviewing all of that this summer."

—Staff writer Mariel A. Klein can be reached at mariel.klein@thecrimson.com. Follow her on Twitter @mariel_klein.

—Staff writer Zara Zhang can be reached at zara.zhang@thecrimson.com.