Griffin, founder and chief executive officer of Chicago- based investment giant Citadel, earned a bachelor's degree in Economics in 1989 from Harvard and founded his firm a year later.
The USD 150 million gift is principally focused on supporting Harvard's financial aid programme, which Griffin described as "an investment in the next generation of leaders as we continue to break down barriers to an outstanding education".
In recognition of Griffin's gift, the Harvard College Office of Financial Aid will be renamed the Griffin Financial Aid Office and the head of that office will be known as the Griffin Director of Financial Aid.
"It is extremely important that students of all backgrounds have the opportunity to challenge themselves, learn to solve complex problems, and ultimately better our world," said Griffin, who started his career as an investor from his Harvard dorm room.
"My goal with this gift is to help ensure that Harvard's need-blind admission policy continues, and that our nation's best and brightest have continued access to this outstanding institution," he said.
The gift, which will impact as many as 800 undergraduates every year, will establish a cohort of 200 Griffin scholarship recipients and provide matching funds through the new Griffin Leadership Challenge Fund for Financial Aid for 600 new scholarships to inspire other alumni and friends to contribute to Harvard College's financial aid programme.
Griffin, who will celebrate his 25th Harvard College class reunion in May, has long been a leader in financial aid initiatives at Harvard.
In 1999, in his 10th reunion year, Griffin established a scholarship named in honour of his grandfather. He also served on the Faculty of Arts and Sciences (FAS) Financial Aid Task Force, which approved a new financial aid case statement for the college and focused on raising support from alumni.
Harvard University president Drew Faust said Griffin's "extraordinary philanthropy" would create a more vibrant educational environment for all Harvard students.
The donation includes USD 10 million to establish the new Griffin Professorship of Business Administration at Harvard Business School (HBS) that will support an outstanding faculty member and who generates the field-based intellectual capital that advances the practice of management.
Expressed his appreciation for the donation, HBS Dean Nitin Nohria said: "Our faculty are at the core of our mission of educating leaders who make a difference in the world. Ken's gift will help us achieve that."