Drukhang Thubten Khedrup, the seventh Drukhang living buddha and vice president of the Buddhist Association of China, has given the money to an association of Buddhist monks in Bangladesh, his assistant Yumtan was quoted as saying by state-run Xinhua news agency.
The money will be used to build a pagoda for Atisa, a Buddhist teacher from Bengal who lived in Tibet for more than ten years starting in 1038, preaching and translating scriptures.
Abbot Chunyi, another vice president of the Buddhist Association of China, had donated USD 400,000 for construction of the pagoda in the 2013.
Yumtan said that the pagoda will be a symbol of friendship between China and Bangladesh.
A "living Buddha" is a Tibetan Buddhist monk believed to be the reincarnation of an important religious figure.
There are currently 358 living Buddhas in Tibet.