The U.S. State Department has granted Harvard $2.5 million to transition a University-run public policy program in Vietnam into the country’s first independent, non-profit, U.S.-affiliated university in Ho Chi Minh City.

The planned school—Fulbright University Vietnam—will expand on the existing Fulbright Economics Teaching Program, a public policy master’s program that the Ash Center at Harvard’s Kennedy School of Government established in 1994 with the University of Economics, Ho Chi Minh City. FETP has also received partial funding from the State Department’s Bureau of Educational and Cultural Affairs.

The new university, expected to launch in September 2016, will encompass three schools—a school of public policy and management, a school of engineering and applied sciences, and a liberal arts-style Fulbright College. It plans to enroll its first class of master’s students in public policy and management in fall 2016, according to Elaine Clayton, a spokesperson for the State Department.

Harvard will no longer have a managerial presence in the school’s operations, according to Ash Center spokesperson Daniel B. Harsha, but will continue to retain a strong teaching and research presence at the Ho Chi Minh City-based school.

“The next step which Harvard felt was really needed is to evolve this public policy school into a standalone university,” Harsha said, suggesting that the new school will expand educational opportunities in Vietnam, whose higher education landscape is dominated by for-profit colleges or state universities that lack the research capacity of American universities. “FUV can grow and reach a lot more students than it can now.”

Policymakers in the U.S., for their part, are hailing the new university as an important step in developing diplomatic and academic ties with Vietnam.

“Fulbright University will be an incredible asset to Vietnam, because with academic freedom and with the energy and association with Harvard and all of the things that will come from it, they’ll be just a great asset for this country to take its education levels to an even higher level,” U.S. Secretary of State John F. Kerry said on Friday, speaking in Hanoi at an event in celebration of the school.

The Vietnamese government approved the program’s transition into an independent university in principle last year, and program administrators are now fundraising. The university has set a goal of raising $100 million and enrolling 2,000 students in its first five years. So far, it has raised about $40 million in pledges.

Harvard has a long history of involvement in Vietnamese higher education. It established FETP in Ho Chi Minh City a year before the U.S. and Vietnam formally normalized their diplomatic relations in 1995, and for a short period of time, Harvard was even charged administering the Fulbright Program in Vietnam, traditionally a role of the local U.S. embassy.

“Harvard has played an important role in helping restore ties between the nations,” Harsha said. “The State Department is really enthusiastic about this.”

Today, using curriculum from the Kennedy School’s public policy degree program, FETP, also known as the Fulbright School, focuses on educating Vietnamese students about developing countries and hosts a number of Harvard professors, according to its website.

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

—Staff writer Luca F. Schroeder can be reached at luca.schroeder@thecrimson.com. Follow him on Twitter @lucaschroeder.