IT Bombay was the second IIT to be established in 1958 with assistance from UNESCO and with funds contributed by theSoviet Union. UNESCO agreed to provide equipment and technical experts mainly from the Soviet Union, while the Government of India accepted the responsibility for all other expenses  the cost of the building project and recurring expenses.
The site chosen for the institute was Powai, eighteen miles (29 km) from the of Bombay (Mumbai), with an area of 550 acres (2.2 km2) which was donated by  Shri Chandrabhan Sharma patriarch of Powai, to contribute to the cause of nation building. This is the same site where the prestigious Indian Institute of Technology proudly stands. While construction was being completed, the first academic session of the Institute opened on July 25, 1958, in its temporary home at the Synthetic and Art Silk Mills Research Association (SASMIRA) building in Worli (Bombay) with 100 students. These students were  from over 3,400 applicants for admission to the first year undergraduate programmes in Chemical, Civil, Electrical, Mechanical and Metallurgical Engineering. One of the  objectives of establishing the Institute was to facilities for studies in a variety of specialised engineering and technological sciences. The need for establishing adequate facilities for postgraduate studies and research was kept uppermost in mind in the founding years.Jawaharlal Nehru laid the foundation stone of the Institute at Powai on March 10, 1959.