The bill made it mandatory for the institute to fill up half of their seats with students from the state.
"The university will function within two years. While no other private university has provision of reservation for Odia students, a world class university like Xavier will have such facility," said Badri Narayan Patra, state minister for higher education.
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Xavier will be the sixth private university in the state, after KIIT, Siksha o Anusandhan (SoA), Centurion, ICFAI and Sri Sri University.
The institute had been pursuing the matter at the government level for past three years and finally got the cabinet nod last month after issues such as land requirement and reservation for Odia students were sorted out.
The institute had originally sought 100 acres for its proposed second campus and finally settled with 35 acres of land near Jatni, on the outskirt of Bhubanesar.
The university has plans to start some new programmes such as two year courses in Health Care, Public Policy, Environment and Sustainability management and enrolment for PhD at Jatni campus.
Its other campus at Bolangir will be fully residential and will only offer the Post Graduate Diploma in Rural Management.