The move comes in the wake of Mumbai recording more than 5,500 COVID-19 cases and the death toll crossing the 200 mark.
Civic body BMC anticipates that in a worst-case scenario, Mumbai will have around 70,000 positive cases by the end of this May.
"As per the instructions of the state government, MMRDA has started construction of 1,000 beds quarantine and isolation facility for non-critical COVID19 patients at BKC exhibition ground," Metropolitan Commissioner R A Rajeev said in a statement.
"The hospital will be fully equipped with the resources & staff necessary for the treatment of non-critical COVID-19 patients. MMRDA stands firm with the state in this crucial fight against COVID-19," Rajeev said.
He further said the make-shift construction is expected to be completed in 15 to 20 days.
"Once fully functional it will be handed over to BMC for further operations," Rajeev added.
"Initially, out of the 1,000 beds, 500 will have an additional oxygen facility. The centre will also house a pathology lab for basic blood tests. The entire expense of setting up of the facility will be borne by the authority," the authority said.
Rajeev said that an additional facility up to 5,000 beds can be prepared if there is a requirement in future.
The Mumbai Metropolitan Region Development Authority (MMRDA) has joined hands with city-based Jupitar Hospital for setting up the facility.
BKC, touted as the financial district of the megapolis, houses headquarters of major institutions like SEBI, NSE, Nabard, Bharat Diamond Bourse, as also of financial institutions like ICICI Bank, IL&FS as well as Reliance Industries' Jio Garden.
Meanwhile, the BMC has also taken steps to create quarantine facilities in the city and has transformed the National Sports Club of India (NSCI) in Worli, Andheri Sports Complex, and NESCO exhibition centre in Goregaon into quarantine centres for persons who have come in contact with coronavirus positive cases.
NSCI already has readied a capacity of 500 quarantine beds, while NESCO has prepared 300 beds and can accommodate a total of 1240 beds. BMC is already planning to convert some of the nearly 1,200 municipal schools in the city as quarantine facilities. PSK MRMR