"The structure will be constructed one km off the sea shore in the Arabian sea", he said.
The announcement was greeted by thumping of benches by the members.
"Erecting the memorial was approved today by a meeting of the sub-committee headed by the Chairman of the Legislative Council," he said.
Chavan said, besides himself, the Speaker of the Assembly, deputy chief minister, opposition leaders in Lower and Upper House, deputy Speaker and deputy chairman attended the meeting.
"The state government will seek required clearances from the Coastal Regulatory Development Authority and union Environment Ministry for the purpose," the chief minister said.
The Guardian Minister of Mumbai will be the chairman of the committee to monitor and follow up the process, he added.
The Congress-led Democratic Front government had first made an announcement to erect 309-feet statue of Chhatrapati Shivaji in 2004.
The then Finance Minister of the state Jayant Patil made the announcement during his budget speech.
The memorial was supposed to be built on the lines of the Statue of Liberty in the US and Swami Vivekananda Rock Memorial in Kanyakumari.
Chavan's deputy and senior NCP leader had proposed in March that an alternative site was being finalised as CRZ norms would not allow a statue in the sea.