The education city, to be spread over an area of 1500 acres, would be established at Mullanpura, he said.
It was his government's firm resolve to make Punjab the most literate state in the country, Badal told a gathering after inaugurating a new block of a commerce and management college here.
The state government had framed policies to strengthen the base of education in the state, he said.
The Deputy Chief Minister invited Ludhiana-based Oswal group to establish a world class university in the state.
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"I invite the Oswal group to help in establishing a world class university in Punjab," Badal said.
On remarks by some Congress leaders that the state's fiscal health was "decaying", he dismissed this as "baseless propaganda".
The SAD-BJP government had successfully initiated a sustained campaign to make Punjab the most preferred investment destination, Badal said.