The decision was taken at a meeting yesterday in New Delhi convened by the Union Water Resources Ministry with officials of both Uttarakhand and Himachal Pradesh, Uttarakhand Chief Secretary Subhash Kumar said here.
Uttarkhand will also get help from Centre to make the detailed project report in the joint venture with Himachal Pradesh government, Kumar said.
The decision comes following the pressure mounted by both the states at the Centre in recent months to bear 90 per cent of the cost of the project.
The multi-purpose project would generate 660 megawatt of electricity besides being capable of irrigating 97076 hectares of agricultural land.
To be built at a cost of Rs 7193 crore, the project can also release 619 mcm of potable water.
Besides Uttarakhand and Himachal Pradesh, Haryana, Delhi, Rajasthan and Uttar Pradesh would also benefit from the project to be built on Tons river, a tributary of the Yamuna, which flows from Dehradun district in Uttarakhand to Sirmaur in Himachal Pradesh.