Nike cofounder Phil Knight, and his wife, Penny, have donated $1bn to the University of Oregon in what is believed to be the largest known donation to a flagship university.

The donation, which was first reported by local Oregon media and the New York Times, will go toward the creation of a new engineering school in Eugene.

The University of Oregon’s president, Karl Scholz, said in a statement to local Oregon outlet LookOut Eugene-Springfield on Wednesday morning that the Knights have “a long history of believing in things before they exist” and that “they did it in 2016, and they are doing it again now, at a scale that is genuinely hard to take in. I am grateful to them, and I am grateful to be here for it.”

In the announcement, Knight also shared a statement noting that “to make an audacious dream a reality requires more than a vivid imagination”.

“It also requires the sort of opportunity that our great American universities, both public and private, have historically provided,” he said. “This is no time to abandon them.”

He added: “Penny and I are grateful for the chance to invest in our most promising young people’s future in this important way.”

Knight, 88, is a graduate of the university. The latest donation brings the Knight family’s known total giving to the University of Oregon to more than $2bn, according to the New York Times.

Scholz said in an interview with the New York Times about the donation that “one of the most successful businesspeople in the history of humanity, and one of the most generous philanthropists in the history of humanity, has said higher education is worth an investment of this magnitude.

“At a time when we’re all feeling a little bit under siege, this is tremendous news,” he said, adding that the gift amounted to “a screaming endorsement of the importance of what we’re doing”.

The University of Oregon did not immediately respond to a request for comment from the Guardian about the donation.

Bob Guldberg, a vice-president at the university who is also a professor of bioengineering, also told the New York Times that the $1bn donation will allow the university to establish a full undergraduate program that could help address a shortage of engineers in the state.

The news on Wednesday comes as earlier this month it was announced that the Knights were committing $1.1bn to Providence St Vincent Medical Center and to Providence Heart Institute to create Oregon’s first hospital dedicated exclusively to women’s health.

“Penny and I have always believed that real breakthroughs come from people willing to take on the toughest challenges,” Knight said in a statement earlier this month. “Providence has shown that kind of ambition in cardiovascular care, and we see the same opportunity to do something truly distinctive for women’s health. We’re proud to invest in teams that will change what’s possible for communities across Oregon and beyond.”

Last year, Oregon Health & Science University announced that it had received a $2bn commitment from the Knights to its cancer institute, which the university said would “transform the future of cancer care and set a new standard globally”.