Construction work on a long-awaited international airport in Bangalore starts in June following a government move to ease state restrictions on private airports, officials said on Thursday.

A contract to build the Rs 1,200 crore (Rs 12-billion) airport has been awarded to a consortium led by Germany's Siemens group, which is partnered by construction giant Larsen and Toubro.

S M Krishna, Chief Minister of Karnataka, told reporters at a breakfast meeting that ICICI Bank would lead the debt arrangements for the 4,200-acre project, which would take 30 months to build.

"ICICI has agreed to underwrite the entire financial debt amounting to Rs 515 crore (Rs 5.15 billion)," said K Jairaj, principal secretary to the chief minister.

The project cost would be divided between debt and equity, he told Reuters.

Bangalore's current airport, originally built for defence uses and controlled by defence authorities, can only handle 20 lakh (two million) passengers and 30,000 tonnes of cargo.

Jairaj said the new airport would have a capacity to take 40 lakh (four million) passengers per year, of which 10 lakh (one million) would be international. It could also take cargo of 130,000 tonnes a year.

In April, the Union Cabinet approved a legislative amendment to end state restrictions on private airports except in air traffic control and security, freeing up the way for financing the Bangalore airport.

The restrictions had held up the financial arrangements, which depended on the freedom of the airport firm to carry out activities in a liberalised environment.

International airlines including Lufthansa and Malaysian Airline System are already flying to Bangalore, and the absence of an international airport is seen as an obstacle to the booming tech city's growth.

Lufthansa was planning to increase the number of weekly flights to five from the current two, officials said.

The private consortium holds a 74-per cent stake in the airport company, Bangalore International Airport Ltd, while the Karnataka government and the Airports Authority of India hold 13 per cent each.