Citing the risk of "overwhelming" debt, it says every student will qualify regardless of merit or financial need.
A study produced by the Association of American Medical Colleges estimated that in 2017 75% of medical students graduated in debt. The average debt level was USD 190,000.
The university has reportedly been working for more than a decade to accrue the necessary funds to pay for tuition, and hopes to raise a total of USD 600 million to make the scholarships available permanently.
Students must still however cover the cost of living expenses and accommodation.
NYU School of Medicine made the surprise announcement at its annual White Coat Ceremony last Thursday -- when new students receive a white lab coat as they begin their studies.
In their statement, the university said debt is "fundamentally reshaping the medical profession in ways that are adversely affecting healthcare".
Graduates move towards higher-paying areas of medicine over paediatrics, primary care or gynaecology due to their "staggering student loans".
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".