The proposed upgradation of the project was discussed in a meeting chaired by Chief Secretary Gokul Chandra Pati.
The institute will offer master and diploma degrees in medicine and surgery in national board courses.
The Health Minister Atanu Sabyasachi Nayak in March announced in the assembly that the state government had decided in principle to convert the Capital Hospital to a postgraduate institution. The government had given administrative approval to the proposal of Rs 82.06 crore for upgrading the infrastructure of the hospital.
According to Medical Council of India guidelines, around 25 acres of land is required for the admission of 50 students at PG institute in the first phase.