The prestigious literary award will be paid for by Crankstart, the charity run by Sir Michael and wife Harriet Heyman.
Welsh-born Sir Michael, who is based in San Francisco, is worth $3.4bn (£2.5bn), according to Forbes magazine.
But the prize will not bear his name - it will be known as The Booker Prize after 18 years as the Man Booker Prize.
(BBC News)