Under the first phase of the project, to come up at Manikonda on the city outskirts near Indian School of Business (ISB) campus, Infosys would invest Rs 80 crore in facilities to seat about 1,200 software professionals within two years.

A further Rs 100 crore would be invested to house an additional 1,300 software professionals in the second and third phases of the project, within the next three years.

The state government, on its part, will provide 30 acres of land while Infosys would retain the option to purchase another 20 acres of land contiguous to the plot for its future expansion, the MoU said. Infosys already has a development centre in the hi-tec (Hyderabad Information Technology and engineering consultancy) city complex where over 60 software professionals are working.

The MoU was signed by the chief secretary Mr P V Rao on behalf of the state government and Mr N R Narayana Murthy, chairman and chief executive officer of Infosys on behalf of the company in the presence of chief minister Mr N Chandrababu Naidu. Speaking on the occasion, Mr Naidu said that setting up software development campus here by Infosys was an ample testimony to the quality and depth of it talent in the state and of the confidence in the industry-friendly administration.

We are delighted to expand our operations in Hyderabad which is an important destination for investments on the country's IT map, Mr Narayana Murthy said.

He said his company has followed a strategy of setting up world-class software development campuses which cater to the overall well-being of its human resources and help tap local talent.