"We must make this the decade of vaccines," said Gates, who will make the donation through his Bill & Melinda Gates Foundation.
"Vaccines already save and improve millions of lives in developing countries. Innovation will make it possible to save more children than ever before," Gates said.
Gates made the announcement Friday at the World Economic Forum, in Davos, Switzerland.
Gates' wife Melinda, who co-chairs the foundation, said effective vaccines provide a huge return on investment, when measured in lives saved.
"Vaccines are a miracle—with just a few doses, they can prevent deadly diseases for a lifetime. We've made vaccines our number one priority at the Gates Foundation because we've seen firsthand their incredible impact on children's lives," she said.
The Foundation estimates that the lives of 8.7 million children could be saved worldwide through 2019 if distribution and development of vaccines to prevent malaria, diarrhea, and pneumonia is improved.
It's been an eventful week for Gates. Microsoft on Thursday said strong sales of its new Windows 7 operating system helped propel the company to record revenue in its fiscal second quarter.
Revenues rose 14% compared to the same period a year ago, to $19.02 billion. Net income jumped 60% to $6.6 billion, while earnings per share climbed 57%, to 74 cents. Wall Street analysts polled by Thomson Reuters were, on average, expecting EPS of 59 cents.
Earlier in the week, Microsoft's normally mild-mannered chairman was seen dancing atop a table at a Sundance Film Festival after-party sponsored by his company's Bing search engine.
Photos of the event published Wednesday in the New York Post show Gates grooving amongst a bevy of admiring, female party goers and making "a sort of poor man's Jersey Shore fist pump," according to an observer. InformationWeek has published a report on how telepresence is turning video communications into a near in-person experience. Download the report here (registration required).