The Vansadhara Water Dispute Tribunal (VWDT), set up to look into the dispute between the two states, also declared setting up of a supervisory committee to implement its decision.
The tribunal ordered that the proposed barrage must get required clearances from the Central Water Commission (CWC), the ministries of water resources, environment and forest, tribal affairs, and other bodies.
The VWDT also asked Odisha, the complainant state, to acquire 106 acres land as per relevant acts in its territory for the project and hand it over to Andhra Pradesh within a year once the order is publicised in the official gazette.
Representatives of the two states termed the order as "50:50" victory for them.
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The tribunal was set up after Odisha complained 11 years ago that the construction of the weir will affect its water needs. The Vansadhara originates in Odisha and flows into the Bay of Bengal after traversing 154 kms in Odisha and 82 kms in Andhra Pradesh. The river is common border for about 29 kms in the two states.
"The tribunal hereby permits the state of Andhra Pradesh to construct the Neradi Barrage across the river Vansadhara with ancillary structures," the tribunal said in the order.
The tribunal said that the cost of the project will be borne between the two states on 'ayacut' basis if and when Odisha decides on irrigation using the barrage water in future. 'Ayacut' is an area served by an irrigation project.
"The tribunal hereby permits the state of Andhra Pradesh to construct the side weir along with ancillary structures as proposed," it added.
"Side weir at Katragada shall be totally plugged and made completely non-functional immediately after the Neradi Barrage is commissioned," the Tribunal said.
On the formation of the supervisory committee, the tribunal said it would consist of four members comprising CWC chief engineer (as the panel's chairman), CWC superintending engineer/director and one representative each from Andhra Pradesh and Odisha. The Centre and the states have to name the members "not later than three months" from the publication of the decision in the official gazette.
Asked about his initial reading of the order, R S Jena, who represented Odisha in the case, said, "Both the states have won the case 50:50. We are not satisfied for the 50 per cent of the part we have lost. But we are happy with the part of order in our favour. Andhra Pradesh will have to follow all the conditions imposed."
D Srinivas, Andhra Pradesh's advocate general, said, "It's a win-win situation. Yes, absolutely (satisfied with the verdict). The final decision is in our favour."
Odisha had approached the Centre on February 13, 2006, complaining that it was likely to be affected by "prejudicially" if the lower riparian Andhra Pradesh constructed the proposed weir.
Meanwhile, it had also approached the Supreme Court, which had on February 2, 2007 directed the Centre to set up the tribunal. Subsequently, the central government issued a notification about its formation on February 24, 2010.