The vaccine for both humans and animals would be developed simultaneously at separate labs at the Institute of Animal Health and Veterinary Biologicals (IAH&VB) at Palode near here, under the state Animal Husbandry Department.
State Animal Husbandry Department Director N N Sasi said the vaccines would be developed using advanced cell culture technology.
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With this, the state government would be the first in the country to manufacture anti-rabies vaccine directly, department sources claimed.
The institute at present produces viral and bacterial vaccines against cattle and poultry diseases.
The detailed project reports for manufacturing the vaccine were almost ready and the report on common facilities for both labs like electricity, water and steam had already been submitted to the government, he said.
The move comes at a time when a baby girl and many others suffered stray dog bites in the suburbs of Thiruvananthapuram earlier this month.
"Our objective is to complete the infrastructure facilities and start the work within the next six months. If everything goes as planned, we can start production within the next two-three years," Sasi told PTI.
"An estimated Rs 150 crore is expected as total project cost," he said.
The southern state is not only planning to produce the vaccine for its own use but also sell it at an affordable rate to other states, which are also facing dearth of anti-rabies vaccine.
Once production commences, the vaccine would be distributed through all veterinary hospitals and public health centres across the state.
At present, Kerala procures the vaccine from Hyderabad-based Indian Immunologicals Limited (IIL), a subsidiary of National Dairy Development Board.
"A total of 10 million doses of both human and animal anti-rabies vaccine is planned to be produced at our labs. The quantity can be increased in the further phases according to the demand," he said.
"We hope that we can not only meet the entire demand of the state but also the requirements of other states in this regard," he said.
Shortage of vaccines, delay in distribution, budget issues and complicated purchase procedures were some of the major problems faced by the health and veterinary authorities in getting anti-rabies vaccines.
"As the government is directly manufacturing it, profit will not be a concern. There is also no need for marketing and advertisement. So, we can make available the vaccine at an affordable rate in the market," Sasi said.
He said other states can buy from Kerala without the complicated tender procedures as it is a government product.
National Bank for Agriculture and Rural Development Consultancy Service (NABCONS) has been entrusted with preparing the project report of the initiative.
NABCONS would supervise the entire project including the construction of labs and the production of vaccine up to two batches, the official said adding the project would be handed over to the department after that.
Cutting across rural and urban barriers, stray dogs have been posing a great threat to people, especially women, children and senior citizens in Kerala for some time.
According to a report submitted in the Supreme Court recently, more than one lakh people in Kerala had been bitten by dogs in 2015-16.
The report also said Kerala is estimated to have a stray dog population of 2.5 lakh, which feed on the waste and garbage dumps across cities and towns.
A 50-year-old fisherman succumbed to injuries after he was mauled by a pack of stray dogs in coastal Pulluvila near here in July.