The decision was taken at a meeting of the state cabinet, chaired by Chief Minister Devendra Fadnavis here.
Noted scientist Dr Raghunath Mashelkar will be the co-chairman of the council.
"This council will help Startup India movement and will work as a platform for coordination to prepare road map and encourage innovations," Fadnavis said.
The Council is expected to create a cross-cutting system to boost innovation performance in the state.
The cabinet also decided to set up a State Management Unit to speed up implementation of rural housing scheme.