Shiv Sena chief Uddhav Thackeray, who is the grandson of Prabodhankar, was present on the occasion.
Fadnavis termed Prabodhankar as "the great social reformer who fought against all the odds" and hailed his efforts to wipe out social disharmony.
"Prabodhanji fought against all the odds when the society was in the grip of illiteracy, untouchability, superstitions, and created an atmosphere of public opinion against these social evils," said the Chief Minister.
He said installation of (Prabodhankar's) portrait inside the hall of BMC was a "delayed decision and it should have been taken long back".
Born in September 1885, Keshav Sitaram Thackeray, known as Prabodhankar was a social reformer, author and a key leaders of the Samyukta Maharashtra Samiti which successfully campaigned for the linguistic state of Maharashtra.
He is the father of late Shiv Sena supremo Bal Thackeray.
"The path of social transformation was well followed by his son Bal Thackeray who founded Shiv Sena to protect the Marathi 'manoos' (people) in Mumbai and Bal Thackeray's legacy is being carried forward very well by his son Uddhav Thackeray," added Fadnavis.
Uddhav thanked the Chief Minister, corporators and team of municipal officers who played a key role in installing his grandfather's portrait.
"The beginning has been very august...That we are going to fly the saffron flag in the month of March," said the Sena chief, whose party is ruling the BMC in alliance with BJP.
Uddhav also outlined the work of social reforms done by his grandfather like abolishing child marriage, untouchability and women empowerment.
Civic commissioner Ajoy Mehta, mayor Shehal Ambekar, MP Arvind Sawant, state Housing Minister Prakash Mehta were among those present.
Meanwhile, Mehta launched several initiatives to
facilitate Ease of Doing Business while Ambekar launched Automatic Napkin Vending Machines.
"We have made the entire shop licensing and renewing process online which would not only end the inspector raj, but also help applicants to get the licenses while sitting at home," said Mehta adding the BMC has also simplified the application form.
The civic chief also launched the revamped portal of the civic body.
Before today, the corporation hall had only two portraits - of philanthropist and pioneer of Mumbai's development Nana Shankarseth and Dadasaheb Donde, one of the leaders of the Samyukta Maharashtra movement.