Nationalist Congress Party (NCP) spokesperson Nawab Malik said that they had fought for the cause since a long time.
"The National Textile Corporation (NTC) and the textile ministry wanted Rs.3,000 crore for the land, while the state government wanted it for free," Malik said.
"Our leader Vijay Kamble had suggested that the NTC could earn enough money by transferring the development rights in the open market," he added.
The Shiv Sena also welcomed the decision. "Our leader Sanjay Raut had strongly supported the demand of transferring the entire 12.5 acre piece of land for the memorial, while the centre had initially commissioned only five acres for it," party spokesperson Neelam Gorhe said.
Maharashtra Pradesh Congress Committee President Manikrao Thakre said it is a proud moment for Indians, especially for Ambedkar's followers.
"The Congress had promised to resolve this issue and we are glad that it has been done," Thakre said.
Samajwadi Party President Abu Azmi said that it has come as good news for Ambedkar's followers on the occasion of his death anniversary. "All Ambedkar followers are ecstatic and in a celebratory mode," he said.
The mill plot is located near Chaityabhoomi, where Ambedkar was cremated Dec 6, 1956, at Dadar at the Arabian Sea coast.
Since last year, various Dalit and other political parties have demanded that the land of the India United Mills -- or Indu Mills, as it is known popularly -- be handed over for the Ambedkar memorial.
Last December, a group of Dalit activists led by Ambedkar's grandson Anandraj Ambedkar had stormed the mill complex and virtually captured it for a few days.
They also installed statues of Ambedkar and Lord Buddha, but finally vacated the premises after a court order.