The University of Cambridge will provide more than £100 million in bursaries over the next 10 years to support students experiencing financial pressures.
The bursary scheme will help undergraduates at Cambridge with living costs from October this year so they do not have to rely on their parents as much.
More students will qualify for support as the threshold for eligibility will rise from the current maximum household income of £42,620 to £62,215.
The university expects between 25% and 30% of students to be eligible for the support - currently it is around one in five.
It comes as the most selective universities are under increased pressure to improve access to higher education for different groups of students including those from disadvantaged backgrounds.
The expansion in bursary provision at Cambridge has been made possible through philanthropic donations from alumni and friends of the institution.
Research by the university suggests many students struggle to meet all their expenses because parents often cannot afford to contribute as much as the means-tested student loans assume that they will.
Professor Stephen Toope, vice-chancellor of Cambridge University, said: "This new enhanced bursary scheme, which wouldn't be possible without the generosity of donors, will help to ease some of our students' financial worries."
The launch of the enhanced bursary scheme follows a pilot scheme involving 20 colleges established and largely funded by Trinity College.
Professor Catherine Barnard, senior tutor at Trinity College, said: "The enhanced bursary scheme is about removing barriers, and helping students fully participate in university life.
"Our evidence suggests supporting students in this way not only improves their wellbeing but ensures they can thrive while studying at Cambridge."