The money is the result of an agreement between Indiana State University and Pioneer Oil.
Some states like Ohio and Pennsylvania use a heavier hand when regulating natural resource extraction on state-owned land.
The approved lease establishes royalty payments between the city and Pioneer Oil, which plans to drill on Indiana University State's campus.
Pioneer Oil now has the approval of the city and Indiana State University.
Indiana State University Trustees said university officials can start negotiations with oil company about drilling on campus.