The star of The Apprentice and Labour peer said he wanted to boost Gordon Brown’s bid to stay at Number 10.
“When I have made political donations in the past, I have always done so at the time of a general election to assist in the running costs of the campaign,” he said.
“I adopted this policy in 1997 and 2001 and am doing the same again this time.”
Lord Sugar donated £200,000 to the party in 2001 and £150,000 in 1997.
Business Secretary Lord Mandelson has welcomed the money.
“Lord Sugar has announced he is making a donation of £400,000 as he has done in previous elections,” he said.
“Lord Sugar is a great example and a powerful voice for British enterprise and the values of hard work and I’m very pleased that, as in 1997 and 2001, he has again chosen to show his support for Labour and our vision of a future fair for all at this General Election.
“Lord Sugar’s kind donation will help Labour candidates across the country make that case for Britain and for British business. We are grateful for his support.”
The donation was revealed on the day the Conservatives unveiled plans to change the rules for giving money to political parties.
The “big donor era” must come to an end, the party said.
“The public are concerned about the influence of money on politics, whether it is from the trade unions, individuals, or the lobbying industry,” the Tory manifesto said.
“We will seek an agreement on a comprehensive package of reform that will encourage individual donations and include an across-the-board cap on donations,” the document added.
