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The five-year award funding will support teaching, research and outreach related to Alzheimer's.
President Eli Capilouto announced the policy on Friday for students, faculty and staff.
A mask requirement will remain in place for people who are not vaccinated against COVID-19.
The University of Kentucky will return to normal operations when students arrive on campus in August, President Eli Capilouto announced Thursday.
Because of the coronavirus pandemic, the ceremonies will be held virtually this month.
UK President Eli Capilouto called it a "substantial" hit to the university's budget.
The university cited a higher positivity rate among students in sororities or fraternities compared to the general student population.
The institution said that the cap will save many students “several hundred, if not thousands, of dollars.”
The institution said that its proposed budget for fiscal year 2020-21 also would provide financial aid of about $148 million, triple the amount the university offered in 2011.
The University of Kentucky will begin its semester on Aug. 17 and end it at Thanksgiving break in an effort to accommodate concerns over the COVID-19 pandemic.