"This new fund is going to help countries who are sued by the tobacco industry fight back in court and win," Bloomberg, the former mayor of New York and one of the world's richest people, told reporters in a telebriefing.
Bloomberg and Gates, the billionaire co-founder of Microsoft , cited examples such as Uruguay, which since 2010 has been fighting a legal challenge by the cigarette maker Philip Morris International against the use of graphic health warnings on tobacco products.
Australia has also been fending off a World Trade Organization challenge and a legal challenge by Philip Morris against its anti-tobacco laws.
The tobacco industry's use of international trade agreements to threaten and prevent countries from passing tobacco control laws was unacceptable, Bloomberg said.
"This is not about trade," he said. "No one is a stronger supporter of capitalism and trade than I am. This is about sovereignty and whether a country has the right to set its own public health policies."
Philip Morris International said in a statement that it respected "a government's authority to regulate in the public interest" and believes "sound tobacco control policy and compliance with international law can easily coexist".
"Governments can and should honour their international obligations when enacting tobacco control measures, and this fund can provide them with resources to do so," it said.