Hyderabad, July 3 (PTI): The fourth US consulate in the country will be set up here, with the Andhra Pradesh government today signing a lease agreement with the American authorities for it.

The agreement was signed in the presence of Chief Minister, Y S Rajasekhara Reddy, and US Amabassador, David C Mulford.

Initially, a temporary consulate office will be located at the Paigah Palace, a heritage building of the Nizam period, which presently houses Hyderabad Urban Development Authority Office.

The state government has allotted 12 acres of land at Madhapur, the city's IT hub, where permanent campus would come up later.

It will be fourth consulate in India after Mumbai, Kolkata and Chennai.

Speaking on the occasion, Mulford said that US$ 7.6 million would be spent on renovation works at the temporary office which will become operational late 2008.

The permanent facility would be ready by 2011, he said.

Mulford said Hyderabad had been chosen for locating the consulate for its "strategic importance and impressive mix of achievements in varied fields".

"It is a well-managed city, a city that works. It has a very broad and diverse economic base," the US Ambassador said adding that Hyderabad was among the cities which accounted for a "large and significant visa demand."