The development comes ahead of civic polls in Mumbai which are expected to be held next month.
Urban Development Department today issued a notification, stating that 2.03 hectares out of 4.84 hectares land at Indu Mills at Dadar has been deleted from 'special industrial zone' and instead included in the surrounding residential zone and reserved for "grand memorial of Bharat Ratna Dr Babasaheb Ambedkar".
Prime Minister Narendra Modi had laid foundation stone for the memorial in 2015, but the project didn't make much progress after that.