Addressing the affordability issue could help alleviate physician shortages, said Rafael Rivera, associate dean for admissions and financial aid.
Seventy-two percent of graduates from medical school in 2017 graduated with a median of $180,000 in debt, according to data from the Association of American Medical Colleges cited by the university.
Dr Robert Grossman said that "aspiring physicians and surgeons should not be prevented from pursuing a career in medicine because of the prospect of overwhelming financial debt".
N.Y.U.'s School of Medicine announced Thursday it will cover tuition costs for all of its students - regardless of their financial standings or backgrounds.
According to The Wall Street Journal, the institution has so far raised over $450 million of the almost $600 million it needs to fully cover the costs of its medical students' tuition.
According to the Association of American Medical Colleges, the median debt of a graduating medical student in the United States is US$202,000 - while 21% of doctors who graduate from a private school such as NYU face over US$300,000.
The medical school announced the news at its annual White Coat Ceremony, where students erupted into applause.
With a lower debt burden, the school is hopeful more students will pursue lower-paying fields, such as primary care, pediatrics and OB/GYN.
Medical school officials said the scholarships would open up the school to a wider pool of applicants and reduce the incentive for debt-laden students to enter higher-paying specialties, such as neurology, orthopedics and cardiology. The university has raised $450 million out of the $600 million it estimates it will need to cover the scholarships, including $100 million from Home Depot founder Kenneth Langone and his wife, Elaine, according to the publication. Tuition had been set at $55,018 for the coming year.
"We don't want this debt to hang over their heads and persuade them from pursuing careers of passion", Rivera told ABC News.
Most medical students will still need to pay about $29,000 for annual room and board and other living expenses. -Ph.D program have already had their tuition costs covered by the National Institutes of Health. That's a first for any medical college in America.