The school at Mugalia Chaap village near the state capital will be developed on the lines of the Navodaya Vidyalaya.
The medium of instruction in the school would be English.
The school will be constructed on 10 acres of land with facilities for hostel, staff quarters and a modern playground, among others.
Sixty per cent of the students would be drawn from the families of labourers and farmers while the remaining seats would be open to locals, Chouhan said, adding that an Industrial Training Institute (ITI), too, would be set up there on five acres.
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"The school will be built at an estimated cost of Rs 30 crore. It will be the first school of its kind in the country for providing quality education to the children of labourers and farmers," Chouhan said on the occasion.
The chief minister said that the institution will emerge as a centre of excellence and would be named as the 'Deendayal Shramodaya Vidyalala'.
"As long as your 'mama' (Chouhan is popularly referred to by that term for maternal uncle in MP) is alive, no children would be allowed to face any difficulty in getting education for the want of money," he said, pointing to the children in the gathering.