The construction of a new medical research institute has been given a boost after receiving a £5million donation.

The Royal Free Charity, which supports The Royal Free Hospital in Pond Street, Hampstead, has been given the money by the Pears Foundation for a new building.

Based next to the hospital, it will be named The Pears Building, and will be home to the UCL Institute of Immunity and Transplantation, which will carry out research into diseases and stem cells.

Construction is due to start next year, and is planned to finish in 2017.

The Royal Free Charity and UCL are raising the £42million needed for the project, and together aim to raise a further £25million to support five research teams based at the institute.

The first of its kind outside the United States, it will place researchers in close proximity with patients, who could take part in clinical trials.

It will also house the Royal Free Charity and the hospital’s volunteering department.

Trevor Pears CMG, executive chairman of the Pears Foundation, said: “My brothers and I are proud to support our local NHS hospital.

“The Royal Free London has a well-earned reputation as one of the UK’s leading teaching hospitals and with the exciting partnership with UCL, we are confident this new institute will deliver research breakthroughs and treatments for the benefit of thousands of patients in London and across the UK.

“We are honoured to have the building named after our family.”

Chris Burghes, chief executive of The Royal Free Charity, said: “We are hugely grateful to the Pears family for this generous donation. We have been able to take a major step towards achieving our vision to create the hospital of the future, enabling pioneering medical research that transforms the patient experience.”