Sunderland University is to honour the 91-year-old Tyneside millionairess by naming part of its library extension "the Catherine Cookson Reading Room".
The chairman of the university's development trust, local businessman Sir Tom Cowie, said the gift would go towards developing the university's riverside campus.
In 1991, the then polytechnic awarded an honorary doctorate to Dame Catherine, who was born into a poor household in Jarrow, but is now one of the North East's wealthiest residents.
The gift is Dame Catherine's second six-figure donation to the university. In 1992, when it was still a polytechnic, she gave pounds 100,000 towards scientific research.
Dame Catherine's first novel was published in 1950 and her worldwide book sales in 17 different languages have topped 100 million. Her novels include The Moth, The Mallen Streak and Feathers in the Fire. She received the OBE in 1985, and became a dame in 1992.
Her publisher recently announced that as Dame Catherine is so prolific, new works are guaranteed for the next 10 years.
The university's vice-chancellor, Dr Anne Wright, said that naming the reading room after Dame Catherine reflected the impact of the author's first visit to a public library, more than 20 years before she became a published writer.
Dr Wright added that the money was "another example of the unstinting commitment of Dame Catherine and her husband Tom to advancing educational opportunities in the North East".
The author has also made huge donations to Newcastle University, the latest being pounds 250,000 earlier this year to keep open its previously closure- threatened Hatton Art Gallery.