A decision to this effect was taken after Western Army Commander Lt General Philip Campose called on Badal at his residence here.
The Chief Minister said such a step would go a long way in ensuring welfare of retired and serving army officers.
He directed state government officers to find a suitable chunk of land in Mohali which could be given to the Army on lease for setting up the institute.
"The state government is fully committed for well being of defence personnel who render outstanding services to our motherland," Badal said, according to an official release here.
Badal said the state government had already allotted 200 acres of prime land at Ropar for this purpose.
The Chief Minister asked the Army Commander to explore viability of setting up skill training centres in the state as a joint venture of the state government and Army.
He said it was need of the hour to impart technical training to the youths of the state so that they could be gainfully self-employed.
The Chief Minister told him that the state government would soon open a similar academy exclusively for girls to impart them coaching for joining armed forces.
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