Speaking on the occasion, the president called for moral leadership and greater research. "Good teaching emanates from research. Any university is judged by the research it produces," Kalam told students and academics here.
He opened a virtual university portal, a joint project of Madras University with the Calcutta and Bombay Universities, by which millions of students will be able to access quality education.
"Technology is a learning tool, linking economy and the environment," the president said recalling his own college days and paying tribute to his teachers at the St Joseph's College, Tiruchirapally, under the university in 1950-54.
"The government of Tamil Nadu should be a catalyst", to ensure that all the universities in the state are linked to the tri-university portal online, by which millions of students can get access to quality higher education, Kalam said.
He released 16 books on the university, part of the project to publish 150 such books during the year-long celebrations.
A postage stamp and its first day cover were released on the occasion.
Union Finance Minister P. Chidambaram announced a grant for a super-speciality nanotechnology R&D centre under the university.
Human Resource Development Minister Arjun Sing promised central government's support for a Rajiv Gandhi Chair for Contemporary Studies. Tamil Nadu Chief Minister M. Karunanidhi said a Centre for Dravidian Movement studies will be established at the university.
Kalam also inaugurated the Senate Hall, a beautiful example of Indo-Saracenic architecture after its renovation at a cost of Rs.60 million.
Construction of the Senate House had begun in May 1869 under the supervision of Robert Fellowes Chisholm, one of the great 19th century architects.
Madras University, set up in September 1857 after a public petition by 1,000 citizens, was the only university for the entire southern region till India's independence in 1947.
Its alumni include former presidents, S. Radhakrishnan, V.V. Giri, N. Sanjeeva Reddy, R. Venkataraman and K.R. Narayanan as well as Nobel laureate physicists C.V. Raman and S. Chandrasekar.
Among the dignitaries present at the glittering function were Tamil Nadu Governor S.S. Barnala, who is also chancellor of the university, outgoing vice-chancellor S.P. Thyagarajan and S. Ramachandran, the next vice-chancellor.