"Immediate steps will be taken for the speedy commissioning of the nuclear power plant at Kudankulam," Tamil Nadu Chief Minister J. Jayalalithaa said in a statement. "I hope everybody will cooperate with the state's decision to open the plant."
The announcement comes after Sunday's local elections in the district.
Commissioning for the nearly completed plant has been held up by anti-nuclear protests, which have intensified after Japan's magnitude-9 earthquake and tsunami last March led to a meltdown at the Fukushima nuclear power plant.
Local residents and activist group People's Movement Against Nuclear Energy, who say they are worried about the safety of Kudankulam, have blocked engineers from entering the plant site.
The plant was declared safe by a Tamil Nadu government-appointed, four-member panel headed by the former chairman of the Atomic Energy Commission, M. R. Srinivasan.
Their report says the two 1,000-megawatt reactors comply with safety norms and that the Atomic Energy Commission had approved the plant after a series of safety tests.
Srinivasan told the Asian Scientist magazine Monday that he expects the facility's first reactor to become operational before the end of the year.
Kasinath Balaji, project director for the plant, said he received the green light from the state administration Monday evening.
"We are busy mobilizing our manpower," he said, noting that work on Kudankulam would resume, India's Daily News and Analysis reports.
In an apparent effort to appease demonstrators, Jayalalithaa said her administration would earmark $10,000 to establish boat repair and cold storage facilities for local fishermen and for building houses and roads in the area.
But S.P. Udayakumar, a key PMANE activist, says Kudankulam has "serious unresolved issues."
"They haven't conducted disaster training around the plant or investigated its likely impact on the oceanography and geology," he told Livemint.com.
Udayakumar said he has begun "an indefinite hunger strike" in protest of the decision.
India aims to have 63,000 megawatts of installed nuclear capacity by 2032, Indian Power Minister Sushilkumar Shinde said last month.
The country's energy consumption -- fueled mostly by coal -- continues to grow about 6 percent annually, yet nearly 40 percent of households have no access to electricity.
Tamil Nadu has been grappling with a serve power crisis, facing peak hour deficits and load-shedding from 6-8 hours daily.
Of the 2,000 megawatts of electricity to be generated by Kudankulam, Tamil Nadu will be allocated 925 megawatts.