The Rampal power plant, an India-Bangladesh joint venture on which preliminary work has already begun, will provide much needed electricity to the country when it becomes operational in 2018.
India and Bangladesh signed a deal in 2010 to jointly develop the power plant.
Demonstrators began a four-day "long march" from Dhaka to Khulna in protest against the power plant, which they believe is a threat to the world's largest mangrove forest -- the Sundarbans.
The government is bent on establishing the 1,320 MW coal-fired power plant 14 kilometres upstream of the Sundarbans Reserve Forest, a world heritage site declared by UNESCO.
International rights bodies, environment organisations and many others have tried but failed to urge the Bangladesh government for relocation of the plant fearing for the safety of the ecosystem the forest beholds.
"It is a project of mass destruction," Professor Anu Muhammad, member secretary of National Committee to Protect Oil, Gas, Mineral Resources, Power and Ports, was quoted as saying by the Daily Star.
Engineer Sheikh Muhammad Shahidullah, president of the national committee, inaugurated the "long march" that will travel through Manikganj, Faridpur, Magura, Jhenaidah and Jessore to eventually reach Rampal in Khulna.
They will hold rallies at different places and raise awareness among the locals.