The decision assumes significance against the backdrop of an incident of fire in a school bus, which was carrying students of a Kendriya Vidyalaya, near Dhaula Kuan last week.
Currently, school buses undergo tests at the manual testing centre of the transport department in Burari.
"The Jhuljhuli unit, which is equipped with automated track and computerised system, will ensure proper testing of the buses as per norms," a senior transport department official said.
Besides school buses, fitness tests of All India Tourist Permit Buses will also be carried out at Jhuljhuli, the official said.
Special Commissioner of Transport Department K K Dahiya has directed the officials concerned to make all necessary arrangements to make the Jhuljhuli unit fully functional.