The first instalment of the funds will kick-start Telethon tomorrow night, an live 26-hour television fundraising drive held annually in Perth.

"Telethon is a great Western Australian charity, and we are extremely proud to be supporting the important work of the Telethon Kids Institute, via Telethon, over the next five years," BHP Billiton iron ore president Jimmy Wilson said.

"Our contribution will fund more than 40 new research positions, as well as important studies into Aboriginal health, which could generate ground-breaking new research right here in WA.

"I am excited about the potential our new partnership has to make a real difference in health outcomes for young people in this state and beyond for generations to come."

BHP's donation is part of BHP Billiton Iron Ore's community development program, which has contributed more than $275 million over the past five years to health, education, indigenous development and community infrastructure initiatives in WA.

Each year $1 million of the donation will be set aside to for a new program focusing on Aboriginal health issues in the Pilbara.

As the institute's strategic partner, BHP will support Telethon Kids' new blueprint to make a tangible difference in the community, which will include the recruitment of leading scientists, greater community involvement, new technologies, a commitment to collaboration and translating research into practical outcomes.

Telethon Kids Institute director Professor Jonathan Carapetis said the funding would be transformational.

"This very generous support will enable us to create the best environment for researchers to do their work and see it quickly translated into policy or clinical practice so that it really can make a difference to children's lives," he said.

"We want to accelerate the discovery process and concentrate our efforts on the really significant issues, diseases and disabilities that are affecting children and families here in WA and beyond."

Channel 7 Telethon Trust chairman Kerry Stokes said he was thrilled to acknowledge the contribution, the largest in Telethon's history.

"BHP Billiton is such an important part of the lives of so many Australians, and in particular those living here in Western Australia," he said.

"This is a most generous contribution to Telethon Kids Institute, and on behalf of Telethon I would like to thank everyone at BHP Billiton for their commitment to assist the people of Western Australia and importantly support the major research efforts funded by Telethon for the benefit of all Australians."