Members cutting across party lines said such projects would adversely affect the livelihood of people in downstream Odisha.
The decision to set up the committee was taken after a five-hour debate in the Assembly over the Mahanadi water dispute with neighbouring Chhattisgarh.
Odisha government chief whip Amar Prasad Satpathy had earlier in the day moved a motion on the issue.
As the debate concluded, Satpathy proposed to set up a House Committee on the issue, which will take up the matter with the Centre for setting up a tribunal to resolve the dispute with Chhattisgarh.
Leader of Opposition Narasingha Mishra of Congress said the state government initially ignored Chhattisgarh government's actions of constructing projects on upstream of the river.
The BJD ignored the interest of the people of the state then because it was in coalition with the BJP till 2009, Mishra alleged.
BJP members, however, appealed to the House not to indulge in a blame game and try to unitedly fight for the rights of the people.
Parliamentary affairs minister B K Arukha said the state government has time and again opposed such activities of the Chhattisgarh government, but the Centre has turned into a "mute" spectator.
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