Union Minister for Human Resource Development Smriti Irani laid the foundation stone for the Indian Institute of Management-Vizag on Saturday at Gambiram village, about 25 km from the city.
This is the 14th IIM in the country. The institute will begin the admission process from the next academic year.
It would take four years for the campus to be ready and in the meantime classes will be conducted from Andhra University from the 2015-16 academic year.
Speaking on the occasion, Irani said IIM-Bangalore would act as mentor for IIM-Vizag. This is the first among the 11 premier educational institutes like IIT, Petroleum University, Tribal University and NIIT that had been promised in the State Reorganisation Act, she said.
According to her, the central government has decided to launch free online courses by educational institutes like IIM and IIT from the next academic year.
Andhra Pradesh chief minister N Chandrababu Naidu, said his government would strive hard to establish all the 11 prestigious institutions at the earliest.
Union urban development minister M Venkaiah Naidu said Visakhapatnam city would be developed as a smart city with the help of the US government.