The Hong Kong and Shanghai Banking Corporation, the owners of Midland Bank, are expected to be joined by other leading companies in backing Stewart-Ford, who will make their Formula One debut in the opening round in Melbourne next March.
Stewart-Ford, based at Milton Keynes, have yet to name their drivers and, along with a number of teams, are awaiting signs of Hill's intentions.
With the money now in place, Stewart, a three-times former world champion, reiterated that he would like to have Hill in the team. "It would be a dream come true," he said. "It would almost be a copybook fairy-tale for us.
"Damon has many other offers coming from more well- established teams. I am sure his head is turned by that as well as the money. We might not be able to afford the kind of money Damon Hill could demand as world champion
"For a new team to start their first year with the No 1 on their car would certainly be wonderful. But more than that, Damon has tremendous skills and talents in developing motor cars and he knows the workings of a team."
The championship leader, to be released by Williams- Renault at the end of the season, will concentrate on job hunting when the title issue has been resolved. Hill can win it in Sunday's Portuguese Grand Prix.
Of the sponsorship deal, Stewart, who retired from racing after winning his third title in 1973, said: "I believe it is significant news for motor sport that such a relationship has been forged. We are creating a team with Ford, HSBC and others, which ultimately will mount a determined challenge for the constructors' and drivers' world titles."
Sir William Purves, the group chairman of HSBC, said: "This sponsorship is a first for us and the international financial sector at large, in terms of its magnitude and duration. It represents a highly exciting venture for all involved.
"Jackie Stewart and Ford are recognised throughout the world and, given the commitment of our organisations and our shared pioneering approach, I am confident of the team's prospects."