Home minister P Chidambaram made the announcement after two rounds of high level meeting of cabinet ministers held by the prime minister Manmohan Singh and Congress president Sonia Gandhi in the wake of TRS leader's eleventh day of fast.
“The process of formation of Telangana is to be initiated. A resolution to this effect is to be moved in the Andhra Pradesh assembly," he read out from the official statement.
Chidamabaram said that chief minister K Rosaiah has been asked to withdraw all cases filed against TRS workers and students arrested during the agitation.
Refusing to give any timeline on the formation of Telangana, Chidamabaram requested Rao to break the fast and withdraw the agitation.
As the good news reached NIMs hospital where Rao is under medical attention, Rao is said to have broken his fast at midnight with a coconut water.
"I thank the central government for their decision. I hope a Telangana state is formed soon," he said as he broke his fast.
However, there might still be another hurdle for the center to consider. It has been reported that Rao's son, K T Rama Rao has demanded that Hyderabad should be included in Telangana state.
" Telangana without Hyderabad is unimaginable" , he said in a TV News report.
Following the announcement prohibitory orders have been lifted from Telangana except from Hyderabad.