The Playboy magazine founder donated $900,000 in a last minute bid to stop the famous landmark, which spells out the name of the moviemaking district in California, from being demolished.
Although the actual letters are owned by the city, the land where they stand, over 138 acres on Cahuenga Peak, was to be sold and developed.
However, local charity The Trust for Public Land spearheaded a campaign to raise $12.5 million in order to save it, with the media mogul donating the final amount they needed to reach their target sum.
Referring to the sign as "Hollywood`s Eiffel Tower", he said: "My childhood dreams and fantasies came from the movies. The images created in Hollywood had a major influence on my life."
He added: "Helping to save the Hollywoodsign a second time made this a very special night. We celebrated at the `Iron Man 2` premiere."
California governor Arnold Schwarzenegger said Hugh`s donation provided "the Hollywood ending we hoped for" by enabling the charity to buy the sign from the property developers who had earmarked it as a place to build luxury flats.
Donations toward saving the sign came from all 50 US states, as well as 10 countries and celebrities, including actor Tom Hanks and director Steven Spielberg.
Despite the worldwide support, Hugh blasted Californian residents for not fully appreciating the landmark.
He said: "This town never had a good sense of its own history, never had good signs or markers for the sites and streets where so many internationally famous things have occurred."
The sign was initially built in 1923 as an advert for a real estate development called Hollywoodland.
This is not the first time Hugh has saved the sign.
In the late 1970s, he persuaded donors to help rebuild it after years of neglect had left it a mess of battered panels and skeletal metal.