11 Genomics Medicine Centres are being set up in English hospitals to gather DNA samples to help devise targeted treatments for a wide range of diseases.
It is focusing on cancer and rare genetic diseases.
The aim is to sequence 100,000 genomes within three years in order to develop new tests and drugs.
Patients will have to agree to have their genetic code and medical records - stripped of anything that could identify them - made available to drugs companies and researchers.
Up to 25,000 cancer patients will have the genetic code of their healthy tissue compared to the genetic code of their tumor.
A giant game of spot-the-difference will then take place to identify the precise mutations in DNA that are causing a patient's tumor.