The Uttarakhand government will allocate 200 acres currently leased out to a drug manufacturing company for the All-India Institute of Medical Sciences in Rishikesh.
The state government had given 830 acres on lease, which is ending in March, to Indian Drugs and Pharmaceuticals Limited.
The rest of the land will remain under the jurisdiction of the state Tourism Department.
The decision was taken at a meeting of the state cabinet chaired by Chief Minister Trivendra Singh Rawat, Urban Development Minister Madan Kaushik told reporters.
The lease of the land with the IDPL is ending in March after which the Centre will return it to the state government, he said.
The cabinet also decided to increase the upper age limit for recruitment to technical posts in the state roadways department from 35 to 42 and the time for hearing VAT-related cases from January 2020 to March 2020.
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The cabinet also decided to move the Supreme Court, seeking the review of earlier order of the payment of pension to PWD temporary work-charged employees in three instalments instead of four.
The cabinet decided to reduce the consultancy fee for the reconstruction work at Kedarnath from 3.2 per cent to two per cent.
It was also decided to set up a residential school at Jayharikhal in Pauri district, which will be run by a trust headed by Chief Minister Trivendra Singh Rawat.