The 1,400 mega watt (MW) project, is being set up in Chutka village.
"The Cabinet has allotted more than 41 acres of land to the nuclear power station coming up at Chutka village in Mandla district," state Health Minister and government spokesman Narottam Mishra told reporters here.
The Centre had, five years ago, approved in principle Chutka MP Atomic Power station project based on pressurised heavy-water reactor (PHWR) to come up in 1,200 acres of land area, including private, forest and state government land.
Chutka was having ample water - a prime requisite to run an atomic power station as it was situated close to Narmada river.
The estimated cost to commission this project is around Rs 16,550 crore and it is expected to start functioning in 2021, a state government official said.
Over 15 years ago, a study was carried out regarding the feasibility of this project and it found Chutka as the suitable place for this project in the state, he added.