A Google statement said the company, Calico, would put a particular focus on "the challenge of aging and associated diseases."
Arthur Levinson, chairman and former chief executive of the biotech firm Genentech and chairman of Apple, will be Calico's chief executive and a founding investor.
Announcing the new investment, Google CEO Larry Page said: "Illness and aging affect all our families. With some longer term, moonshot thinking around healthcare and biotechnology, I believe we can improve millions of lives."
"It's impossible to imagine anyone better than Art -- one of the leading scientists, entrepreneurs and CEOs of our generation -- to take this new venture forward," he said.
Levinson said in the same statement: "I've devoted much of my life to science and technology, with the goal of improving human health. Larry's focus on outsized improvements has inspired me, and I'm tremendously excited about what's next."
Levinson will remain chairman of Genentech and a director of Hoffmann-La Roche, as well as chairman of Apple, the statement noted.
Apple's CEO Tim Cook was quoted in the Google statement as saying: "For too many of our friends and family, life has been cut short or the quality of their life is too often lacking. Art is one of the crazy ones who thinks it doesn't have to be this way. There is no one better suited to lead this mission and I am excited to see the results."
Time magazine, which interviewed Page ahead of the announcement, said the details of the project were not yet clear but that it is likely to use its data-processing to shed new light on age-related maladies.
On Google+, Page acknowledged people may be surprised at the effort.
"OK ... so you're probably thinking wow! That's a lot different from what Google does today," he wrote.
"And you're right. But as we explained in our first letter to shareholders, there's tremendous potential for technology more generally to improve people's lives. So don't be surprised if we invest in projects that seem strange or speculative compared with our existing Internet businesses. And please remember that new investments like this are very small by comparison to our core business."
He said that the venture is still in its "very early days so there's not much more to share yet."
Page told Time -- for a cover story titled, "Can Google Solve Death?" -- the effort would include innovative thinking, not just ways to fight cancer.
"One of the things I thought was amazing is that if you solve cancer, you'd add about three years to people's average life expectancy," Page told the magazine.
"We think of solving cancer as this huge thing that'll totally change the world. But when you really take a step back and look at it, yeah, there are many, many tragic cases of cancer, and it's very, very sad, but in the aggregate, it's not as big an advance as you might think."