The AIIMS was officially announced on 28 February 2015, in the budget speech for 2015–16, where the Minister of Finance Arun Jaitley announced five more AIIMS, in Jammu & Kashmir, Himachal Pradesh, Punjab, Assam and Tamil Nadu and an "AIIMS-like" institute in Bihar.[2] Tamil Nadu had proposed five sites to set up an AIIMS. Besides Thoppur, Sengipatti (Thanjavur), Pudukottai town, Chengalpattu (Kanchipuram) and Perundurai (Erode) were considered.[3] In 2018, the union cabinet gave an official approval for the location, on a 222-acre lot in the Thoppur, near Madurai.[3][4][5]
By January 2019, the boundary wall of AIIMS Madurai campus was completed. Prime Minister Narendra Modi had laid the foundation stone of AIIMS Madurai in January 2019.[6] The state government handed over the land to the Government of India in February 2020.[1] In March 2021, the funding agency, Japan International Cooperation Agency (JICA), extended assistance. The loan agreement was signed in February 2022.[7] The Japan International Cooperation Agency (JICA) informed Minister for Health and Family Welfare of Tamil Nadu Ma. Subramanian in February 2023 that the construction of AIIMS Madurai would begin by the end of 2024 and be completed by 2028.