Berkshire Hathaway, the company owned by US investment guru Warren Buffett, has bought $5bn (£2.7bn) worth of Goldman Sachs shares.
Mr Buffett, the world’s most famous investor, said Goldman was an “exceptional institution”.
Hit by the crisis that has engulfed other major US financial institutions, it was forced to change its status from an investment bank this week.
Goldman Sachs said the deal would bolster its finances.
Berkshire Hathaway is buying $5bn of preferred stock bearing a 10% annual interest rate.
It could increase its holding of Goldman shares as under the terms of the deal, it has the option of buying $5bn of common stock for $115 per share at any time in the next five years.
In addition, Goldman Sachs said it was raising at least $2.5 billion in common equity in a public offering.
Goldman said it was pleased that Warren Buffett had made such a significant investment.
“We view it as a strong validation of our client franchise and future prospects,” said chairman and chief executive Lloyd C. Blankfein.
“This investment will further bolster our strong capitalisation and liquidity position.”