The Ambedkar International Airport in Nagpur would be transferred to a joint venture company for development into a multi-modal passenger and cargo hub, with the Union Government giving its nod on Thursday.

The decision of the Union Cabinet came after a Group of Ministers proposed to develop the Nagpur airport into a domestic and international passenger and cargo hub, primarily due to its geographical location that is best suited for the purpose.

"In a move that will encourage economic activity in Vidarbha region, the Union Cabinet on Thursday approved the transfer of the Nagpur airport to the JVC comprising Maharashtra Airport Development Company and the Airports Authority of India," Information and Broadcasting Minister P R Dasmunsi told reporters in New Delhi.

In the joint venture firm, the AAI -- which owns the airport at present -- would hold 49 per cent stake and MADC would have the remaining 51 per cent of equity.

The Cabinet also approved AAI subscribing to Rs 4.9 crore (Rs 49 million) capital in the JVC, which would have a total subscribed capital of Rs 10 crore (Rs 1 billion).