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Mr Gibbons, from Bramford, Suffolk, was "thrifty" and sold second-hand cars and trailers, according to his friends Gary and Trisha Walton.
"You heard rumours about his money, but when we found out how much it was we were quite shocked.
"He was a lovable rogue - a bit of a wheeler dealer.
"People who knew him just knew that was the way he was - that was him and he was quite happy," said Mrs Walton.
Mr Gibbons always praised the care he received at the hospital and felt the nurses did not get paid enough, Mr Walton said.
The donation means the hospital can renovate four wards, improve the children's ward and use the rest of the money for projects suggested by staff.
Laurence Collins, non-executive director of the Ipswich Hospital NHS Foundation Trust, said: "Thousands of people will be touched every day by Mr Gibbons' kindness when they come into the hospital and see an environment which is completely transformed.
"This legacy will mean that we can go way over and above what we would normally be able to afford so that we deliver the best experience for patients, carers, visitors and staff."