A team of experts have been given £8.4million, and will recruit 10,000 patients.
The 'urgent' study - called PHOSP-COVID - will involve a group of more than 50 doctors and experts in things like lung and heart disease and mental health from across the UK.
They will look at how people who were hospitalised have recovered from the coronavirus.
It's been described as the largest comprehensive study in the world, to understand and improve the health of survivors.
Around 10,000 patients are expected to take part.
Oxford's two NHS Trusts (Oxford University Hospitals NHS Foundation Trust and Oxford Health NHS Foundation Trust) are involved.
Professor John Geddes, Director of the NIHR Oxford Health Biomedical Research Centre, and lead for the mental health component of the study, said, "We know that mental health and neurological problems are quite common after viral infections and so it is very important that these are being assessed alongside other health outcomes.
"We will then be able to develop and test new ways of preventing and treating these problems to make sure that people recover as quickly as possible. We are very grateful for a generous gift from the Duke of Westminster which has enabled us to start the research very quickly."
Professor Keith Channon, Deputy Head of Medical Sciences Division (Research) and Director of Oxford Academic Health Partners, said, "Oxford's cardiovascular imaging experts will help to lead the PHOSP-COVID work to understand the consequences of COVID-19 for heart and circulatory diseases.
"These workstreams have also been designated as national flagship projects by the British Heart Foundation, so we are delighted to contribute scientific leadership to this important consortium."
Health Secretary Matt Hancock said, "As we continue our fight against this global pandemic, we are learning more and more about the impact the disease can have not only on immediate health, but longer-term physical and mental health too.
"This world-leading study is another fantastic contribution from the UK's world-leading life sciences and research sector. It will also help to ensure future treatment can be tailored as much as possible to the person."
For those who were hospitalised and have since been discharged it is not yet clear what the medical, psychological and rehabilitation needs for this group of patients will be to enable them to make as full a recovery as possible.
The Oxford University team can look at doing trials of personalised treatments in the future, based on particular disease characteristics.