Mumbai: The Maharashtra government is now close to formally acquiring the iconic Air India building in South Mumbai after the state Finance Department transferred ₹1,600 crore to the Public Works Department (PWD), setting the final stage for the long-pending deal. The landmark 23-storey sea-facing structure near Nariman Point is expected to soon become part of the state’s administrative infrastructure.
According to official sources, the financial transfer has effectively activated the final procedural steps for signing the agreement between the state government and Air India Assets Holding Limited (AIAHL). Once completed, the transaction will formally transfer ownership of the building to the state government, which had already received approvals at multiple levels.
The acquisition price for the building stands at ₹1,601 crore, a figure originally approved by the Centre in March 2024. The Maharashtra Cabinet later cleared the purchase in November 2025, reaffirming the state’s intent to convert the property into government office space. Officials have indicated that the draft agreement is currently being vetted to ensure legal and procedural compliance, and the final signing is expected within the next few weeks.
The government’s move is driven largely by a severe space crunch at Mantralaya and its adjoining administrative buildings, which has forced several departments to function from rented premises across Mumbai. Officials believe that acquiring the Air India building will help consolidate operations and reduce recurring rental expenses.
Once the transfer is complete, the state plans to undertake extensive internal renovations, after which multiple departments currently spread across the city will be relocated into the facility. The government expects the building to become operational within one year of acquisition, significantly improving administrative coordination by bringing offices closer to the state secretariat.
The iconic structure, located in one of Mumbai’s most prime business districts, offers approximately 46,470 square metres of office space, making it one of the largest government workspace consolidations in recent years. Officials note that its proximity to Mantralaya is a key advantage, enabling better efficiency in governance and faster inter-departmental coordination.
The Air India building, constructed in the 1970s on reclaimed land, has long been a prominent landmark in South Mumbai’s skyline. Air India had decided to monetise the property in 2018 after relocating its headquarters to New Delhi, and multiple bidders, including central and state institutions, had shown interest before the Maharashtra government’s bid gained momentum.
The deal also reflects a broader administrative strategy of the state government to reduce dependency on rented office spaces and centralise governance functions in a single cluster. Officials have previously estimated that such consolidation could lead to significant long-term savings in public expenditure.
However, before the final handover, the agreement will undergo legal vetting and procedural scrutiny to ensure there are no contractual gaps. Once approved, possession will be formally transferred, allowing the state to begin redevelopment and internal planning work.
With the Finance Department’s fund transfer now completed, the Maharashtra government has effectively cleared one of the last major hurdles in the acquisition process. The final signing of the agreement is now expected to seal the transition of one of Mumbai’s most iconic commercial buildings into a key government administrative hub, marking a significant shift in the city’s governance infrastructure landscape.
