Hawking said that the goal would re-ignite the space programme, forge new alliances and give humanity a sense of purpose.
He also suggests that space agencies should aim to set up a lunar base within the next 30 years.
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According to Hawking, that there is no long-term future for our species staying on Earth. It would either be hit by an asteroid again or eventually engulfed by our own Sun. Travelling to distant worlds would "elevate humanity", he added.
"A new and ambitious space programme would excite young people and stimulate interest in other areas, such as astrophysics and cosmology," Hawking was quoted as saying by BBC News.
He said that human space travel is essential for the future of humanity because the Earth is under threat from climate change as well as diminishing natural resources.
"I am convinced that humans need to leave Earth," said Hawking, adding that it is time to explore other solar systems as humanity is running out of space and the only places to go to are other worlds.
"If humanity is to continue for another million years, our future lies in boldly going where no one else has gone before," he said.
"Spreading out may be the only thing that saves us from ourselves," he said.
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