The state cabinet on Wednesday approved a proposal to construct two elevated metro line corridors linking important locations in the state's second capital in Vidarbha region.
The project will cost around Rs 8,680 crore and is expected to be completed in six years, Chief Minister Prithviraj Chavan said.
"Of the total cost, the centre and state will bear 20 percent each, the Nagpur local bodies will contribute 10 percent and the remaining 50 percent shall be raised through loans and other sources," he said.
The two lines shall link Automotive Chowk-MIHAN and Prajapati Nagar-Lokmanya Nagar, a distance of around 38 km.
The project approval follows a study by the Delhi Metro Rail Corporation (DMRC).
This is the second metro rail project approved outside state capital Mumbai.
Last year, the state government gave the green signal to the Pune metro railway, which will cost around Rs.10,183 crore and is expected to be completed in phases by 2021.
The Mumbai metro railway's first phase linking Versova-Andheri-Ghatkopar is nearing completion and is expected to be commissioned shortly.