To be built by a consortium, led by the GMR Group and Malaysian Airport Holding Berhad (MAHB), the greenfield project has been waiting for the go ahead from the defence authorities since March last year.

The Andhra Pradesh government and the Airports Authority of India (AAI) are equity partners in the project which will have an equity of Rs 389 crore and debt of Rs 583 crore in the first phase.

Defence ministry sources have stated that the Navigation and Signal School (NSS) at the Begumpet Air Force station will continue to function from the existing airport. The new airport is to come up at Shamshabad while the existing facility is located at Begumpet.

The local flying area of IAF training bases would be extended southwards to encompass the Begumpet airport. The defence authorities have stipulated this condition to ensure seamless operation for training flights. The green signal for the new international airport is subject to these two conditions, highly-placed sources in the civil aviation ministry said.

The conditional clearance follows several efforts by the civil aviation ministry and the Andhra Pradesh government to get clearance for the project from defence authorities. Andhra Pradesh chief minister YS Rajsekhara Reddy had written to defence minister Pranab Mukherjee to ensure speedy clearance for the project.

Defence clearance was urgently required to enable the company (the GMR consortium) to proceed forward for financial closure and start execution of the project, the Reddy had argued. His letter sought defence clearance to the project at the 'earliest' so that delays could be avoided.

The conditional clearance was conveyed to the civil aviation ministry and the Andhra Pradesh government recently, the sources said.

Now the GMR consortium would push for speedy clearance of concession agreement with the central government, the only major approval which is pending. The Andhra Pradesh government has already signed an agreement with the GMR consortium for a state support to the tune of Rs 422 crore by way of interest-free loans for the first phase of the project.

Nearly 5,400 acres of land has also been handed over to the consortium.

According to information available with the civil aviation ministry, construction of a compound wall for the airport project is in progress and the GMR consortium is considering bids for civil construction contracts.

The bid for defence clearance for the new Hyderabad airport was backed by the director general of civil aviation (DGCA) too. The defence authorities were informed that airspace management at the new facility would be handed by AAI.

The GMR group's stake in the greenfield project is to the tune of 63% while MAHB of Malaysia holds 11%. The Andhra Pradesh government and AAI hold 13% each, on the same pattern as the new international airport at Bangalore.

The GMR-led consortium is now looking at ways to factor in the conditions of the defence authorities into the project, the sources said. While seeking speedy defence clearance for the project, the AP chief minister had argued that the defence authorities control significant airspace at Bidar, Dindigal and Hakimpet airports which are located close to the proposed international airport.