UT-Austin president William Powers Jr. made the announcement Tuesday. The gift will be paid in installments over the couple's lifetime, including a portion as a bequest. The money is designated for student, faculty and program support, with more than half of it targeting students' needs.
"We love music, and we have great appreciation for, and belief in, the educational value of the arts," Ernest Butler said.
The Butlers have created nine endowments in the music school since 1983.
Ernest Butler is a retired physician. He and his wife have been active in supporting the arts in Austin and are members of the university's Chancellor's Council.
It is the second-largest gift to the University of Texas at Austin, after the more than $245 million given from the estate of John A. and Katherine G. Jackson. The university's Jackson School of Geosciences is named for the Jacksons.
The Butlers' gift surpasses a $44 million donation made in December 2007 by the Lilly Endowment for a new building for the Indiana University Jacobs School of Music.
The University of Texas' school of music has more than 700 students and nearly 100 faculty members.