"Let me be clear: UC welcomes all students who qualify academically, whether they are documented or undocumented," the former homeland security secretary said in a speech to the Commonwealth Club of California.
"Consider this a down payment -- one more piece of evidence of our commitment to all Californians. UC will continue to be a vehicle for social mobility," she told the audience of more than 500 Wednesday night.
Napolitano has encountered protests since she started her university job Sept. 30, with critics pointing to an increase in deportations while she ran the Department of Homeland Security under the Obama administration.
"I am setting aside $5 million -- right now, for this year -- to support these students with resources like trained advisers, student service centers and financial aid," she said.
The advisers on each of the public university system's 10 campuses will provide guidance on matters ranging from how to pursue legal U.S. residency to applying to graduate school, Napolitano said.
"They do merit special attention," she said of immigrant students. "Oftentimes, they are from families who are very poor and first-generation, so have no one out there to talk to them about student life."
Napolitano said she would also make $10 million available to support graduate and post-doctoral researchers.
Because of legislation signed by Gov. Jerry Brown two years ago, students at California's public colleges and universities who entered the country illegally as children can receive state and campus-based financial aid.
But those immigrants -- known colloquially "dreamers" after the stalled U.S. DREAM Act that would give permanent residency to certain young people who serve in the military or go to college for at least two years -- remain ineligible for federal loans and grants.
About 900 of the University of California's 230,000 students are thought to be "dreamers," university spokeswoman Dianne Klein told the Los Angeles Times.
The money for financial aid and graduate studies will come from discretionary accounts and not from tuition or the university's state-funded operating budget, Klein said.