The programme will examine the role of cannabis medicines in treating pain, cancer and inflammatory diseases.
It follows calls from some MPs for legalisation of cannabis on medical grounds, with 58 per cent backing such calls last year.
In recent years, studies have increasingly supported the medical value of cannabis for treating conditions such as multiple sclerosis, epilepsy and arthritis, and for dealing with nerve pain.
The new programme is a partnership between Oxford University and Kingsley Capital Partners, who are investing £10m an effort to creat a global centre of excellence in cannabinoid research.
Ahmed Ahmed, Professor of Gynaecological Oncology at Oxford, said studies had started to produce exciting biological discoveries, which could result in new treatments for a host of different diseases.
“This field holds great promise for developing novel therapeutic opportunities for cancer patients,” he said.
The programme has received unusual backing – from actor Sir Patrick Stewart, who uses medical marijuana to treat ortho-arthritis.
He told the Telegraph: “Two years ago, in Los Angeles I was examined by a doctor and given a note which gave me legal permission to purchase, from a registered outlet, cannabis-based products, which I was advised might help the ortho-arthritis in both my hands.”
Regular use of an ointment and chewy bar had allowed him to sleep at night, while spraying his hands during the day had brought back mobility in his hands, he said, enabling him to make fists.
“As a result of this experience, I enthusiastically support the Oxford University Cannabis Research Plan,” he said.
The actor said he hoped the research would help him and millions of others.
“This is an important step forward for Britain in a field of research that has for too long been held back by prejudice, fear and ignorance.”
Currently neither the Conservative nor Labour Party officially supports legalising cannabis for medical use. Both the Green Party and Liberal Democrats have called for legalisation for medical use for some time.
Sativex – a prescription-only drug used by patients suffering from Multiple Sclerosis – is the only licensed cannabis-based product in the country and is given to help ease muscle spasms. However it is nonpsychoactive and doesn’t cause a high.
NHS rationing bodies have rejected its use saying it was too costly to justify.