Lord Glendonbrook, former chief executive of BMI, said the gift - one of the largest ever received by the university and equivalent to about a third of the institution's total philanthropic income last year - would help bankroll enterprise education and give an academic underpinning to Loughborough's work in business and entrepreneurship.
The money will be donated through the Michael Bishop Foundation charitable trust. Although it is his first gift to the university, Lord Glendonbrook said he had dealt with Loughborough in his role at BMI and remained impressed by its business credentials.
"The university is well qualified for this kind of activity because of its background and the particular subjects it specialises in," he said. "It is a university that has always been recognised as being close to the private sector and entrepreneurs."
The gift will be used to create an enterprise education centre within Loughborough's School of Business and Economics, and will fund one PhD fellowship within the school.
Lord Glendonbrook said he hoped it would "help local entrepreneurs in a practical way".
"There are lots of things that entrepreneurs and business people can do by themselves without the support of a university, but there are really important issues regarding success that can only be provided by a university," he said.
"Entrepreneurs can always create absolutely new things, but there is an element of business that needs to be underpinned by scholarship, to back it up by real research.
"It's one thing to be an entrepreneur and another thing to be an entrepreneur who's well informed. What we're trying to do is perhaps follow a path that demonstrates that there is real practical advantage and use in having these resources (provided by universities)."