The Maharashtra government has approved the purchase of the iconic Air India building at Nariman Point in South Mumbai for Rs 1,601 crore.

The 23-storey building is owned by Air India Assets Holding Ltd, a company formed by the Union ministry of civil aviation in 2018 to manage all Air India properties.

Reports said all ministerial offices may be moved to the building with some remaining in the Mantralaya, which is the administrative headquarters of the state government.

A fire at the state secretariat in 2012 forced four departments to be shifted to GT Hospital. These four — public health, medical education, water supply and sanitation and rural development — could now shift to Nariman Point.

The building was constructed in 1974 on land owned by the state government. It was built by John Burgee of the New York-based architectural firm Johnson/Burgee.

The building was one of the targets of the 1993 serial bomb blasts in Mumbai. A car bomb exploded in the building’s basement garage, killing 20 people and destroying the offices of the Bank of Oman located above.

While nine floors of the building are vacant at present, three floors house GST offices and the income-tax department works from eight floors.

The ground and first floors are with Air India. All of these may house state government offices over some time.

A PTI report said the state government has communicated to Air India Assets Holding Company that it should hand over the building free of encumbrances.

The building was put up for sale in 2018 as part of Air India’s asset monetisation plans but received a muted response.

In 2019, the Jawaharlal Nehru Port Authority and LIC wanted to buy the property, but the state’s bid was reportedly higher at Rs 1,400 crore compared with bids of Rs 1,200-1,375 crore by the other two entities. Subsequently, the state government headed by Eknath Shinde raised the bid to Rs 1,600 crore.