The legacies from the collapse of the Lehman Brothers investment bank in 2008 include years of turmoil on Wall Street and a nosedive for the Western world's economies.

Now add to the list a science and engineering graduate school to be set up in New York with public investment of land and funding: a key element in the city's drive to reduce its economic reliance on financial services. The competition to build the new campus - launched in December 2010 by New York's mayor, Michael Bloomberg - brought seven consortia entries from 17 universities around the world. Cornell University was announced as the winner last month.

Seth Pinsky, president of the New York City Economic Development Corporation, said the campus project was a response to the fact that the city was "too reliant on a single industry - namely financial services".

After the collapse of Lehman Brothers, conversations were initiated with academics, venture capitalists and community leaders about the single development they believed could improve New York. Becoming a leader in technology and innovation was a "consistent theme".

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Mr Pinsky said: "The key to being a leader in technology and innovation is to have a critical mass of applied sciences research, and R&D activity: specifically a major academic research institution."

While New York already has some of the world's leading universities, Mr Pinsky said that "given the scale of our ambition...which is to become a world leader in technology and innovation, we just didn't have enough of this going on".

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The city will put up $100 million (?64.7 million) to fund infrastructure, as well as providing the land for the campus, to be sited on Roosevelt Island in the East River.

Cornell, based in Ithaca, New York, has also received a $350 million donation for the city campus from Charles F. Feeney, an alumnus who established the Duty Free Shopping Group. Operating costs are $2 billion over 30 years.

Kent Fuchs, Cornell provost, said the public investment showed "the city, the area and the full administration [are] fully committed to making this happen...That they were willing to put up land and not just their willpower but also financial resources, tells us they are as committed as we are."

The New York campus - scheduled to open in a temporary location this September - is, Professor Fuchs said, "not creating the traditional academic structure of faculties, schools or departments, we are creating focus areas or hubs". These will focus on connective media, healthier life and the built environment.

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The campus, expected to open on Roosevelt Island by 2017, will also feature a section run in partnership with the Technion-Israel Institute of Technology focusing on master's degrees in applied science, as well as research. Mr Pinsky expects "hundreds" of businesses to emerge from the campus, noting the business record of graduates from the Massachusetts Institute of Technology, Boston. "This is really the opportunity we are looking to tap."

He described the campus as "an Erie Canal moment", referring to the 1825 state-built canal that helped New York become the East Coast's leading port. He added: "This is an opportunity to lock in a major competitive advantage for decades to come."