The Cabinet Committee on Economic Affairs, which met here yesterday, approved the 'collaboration of IIT, Hyderabad, and Japan', to be executed via an Official Development Assistance (ODA) loan from the Japanese government and the Union HRD Ministry.
The project cost of Rs 1776.50 crore will be met through the ODA loan of Rs 1501.72 crore while the balance of Rs 274.77 crore will be borne by grants from the HRD Ministry over a period of four years between 2013-14 and 2016-17.
"The project would add value through collaborative interactions between academics and with the industry of Japan and (by) exchange of students and faculty.
"This will enhance cooperation between the two nations in the area of science and technology and human resource development," said a statement from the government today.
For the Indian side, the project would also help in the creation of a number of basic infrastructure facilities and faster scaling up of the said IIT with benefits for the Indian economy, it added.
IIT, Hyderabad, is one of the eight new IITs established by the government in 2008.
The collaboration is an externally-aided central sector project resulting from the broader Indo-Japan Collaboration and an agreement between the Indian Prime Minister and Japan for a Japanese loan to fund specific IIT Hyderabad projects.