An 86-year-old US grandfather who has cancer and a caring heart has taught himself to knit so that he can make woolly hats for premature babies.

Retired engineer Ed Moseley felt compelled to take part when Dogwood Forest assisted living facility in Acworth, Georgia, set its residents the challenge of knitting hats for infants born early.

"I told my daughter about it and I said, 'How can I knit? what do I need to do?'," widower Moseley told the Atlanta Journal-Constitution.

His daughter brought him a loom kit with instructions and yarn and he got to work learning what to do.

"I started slowly and learned it just takes patience," he said.

Moseley started knitted while watching TV, training himself to complete a hat in about an hour.

Then he offered to teach his fellow residents and staff how to make the hats, too. Eventually the facility donated more than 300 hats, of which Moseley himself made 55.

The hats went to the neonatal intensive care unit at Atlanta's Northside Hospital, which delivers more babies than any other hospital in the US - including some 2,000 premature babies per year, according to a report on Britain's Independent website.

It is also where Moseley had been undergoing chemotherapy treatment for cancer.

Doug Bunt, whose newborn son Matthew was born prematurely on Nov 12, 2016, told ABC News it was "really nice to know" that someone was "thinking about the well-being of these babies... The fact this man is taking time out of his day to help the kids really means a lot to us."

Mr Moseley's achievement has even inspired children at the school where his granddaughter teaches to learn knitting.

He is now making caps for friends and family. "I am taking orders right now," he said. "As they long as they furnish the yarn, I don't charge anything."