The fund is designed to provide access to innovate life extending medicines.
The DoH said that clinically-led panels have been set up in each region to decide how this funding is spent for their patients locally. The funding will be available from 1 October until the end of March 2011 when a separate cancer drugs fund is introduced.
The £50m fund has been criticised for by-passing the rational cost-control mechanisms introduced by NICE.
Health Secretary Andrew Lansley said the fund was the start of plans to address the disparity in patients' access to cancer drugs in England compared to other countries.
'My aim is to truly empower patients by giving them more control over their care and helping them access the clinically effective drugs that their doctors believe could improve their quality of life,' he said.
'I know this will mean a lot to cancer sufferers, their carers and their families and I want to assure all patients that I am working towards longer term plans to change the way we pay for drugs so patients get better access to drugs and the NHS and taxpayers get better value for money.'
The fund was described by The Lancet as an example of 'political opportunism and intellectual incoherence'.
Dr Bill Beeby, chairman of the GPC prescribing subcommittee, has said the fund questionably fair and could run out.