Telangana to be India's 29th state, Hyderabad the joint capital
The new state will comprise of 10 districts including Hyderabad, which will be the common capital for 10 years, during which period the residuary state of Andhra Pradesh will build its own capital.
The CWC, the highest decision making body of the Congress, passed a resolution after the United Progressive Alliance's co-ordination committee endorsed statehood for Telangana earlier in the day.
Congress leader Digvijaya Singh said the new state will come into being in four to five months.
Congress spokesman Ajay Maken said the CWC meeting was presided over by party president Sonia Gandhi and attended by Prime Minister Manmohan Singh among others. Both strongly pitched for Telangana.
Manmohan Singh told the meeting that the formation of Telangana was very much required "for the development of the entire Andhra region".
"It is resolved to request the central government to take steps to form a separate state of Telangana," Maken said, reading from the resolution.
Digvijaya Singh said the issue would go to the Andhra Pradesh assembly, whose resolution will be sent to the union cabinet, which will appoint a group of ministers to look into issues relating to sharing of water, electricity and safety and security of all three regions of the state.
The CWC decision followed protracted discussions in the party following divisions between its leaders in Andhra Pradesh favouring statehood to Telangana and those opposed to it.
Celebrations broke out in Telangana after the Congress leaders announced the decision. Telangana Rashtra Samithi (TRS), Telangana Joint Action Committee (JAC) and other groups were jubilant.
Earlier, the UPA coordination committee endorsed statehood to Telangana.
"All parties unanimously decided in favour of Telangana," Civil Aviation Minister Ajit Singh said after the meeting held at the prime minister's official residence.
It was attended by leaders of constituent parties like the Congress, the Nationalist Congress Party, National Conference and Ajit Singh's Rashtriya Lok Dal.
The decision by CWC fulfilled a five-decade-old demand of the people of Telangana. This will create two states for Telugu-speaking people.
The announcement ended a chapter in the history of Andhra Pradesh, which was formed Nov 1, 1956 with the merger of Telangana (then known as Hyderabad State) with Andhra State.
Andhra Pradesh will become India's first non-Hindi linguistic state to be divided. Carved out of Madras State in 1953, it was the first state to be formed on linguistic basis.
Andhra Pradesh was India's fifth most populous state, with a population of 84.6 million. Spread over 275,000 square km, it ranked fourth among Indian states in terms of geographical area.
Telangana will have a population of 35.38 million and an area of 1.14 lakh square km.
Telangana, which comprises 10 districts including Hyderabad, was part of the erstwhile princely state of Hyderabad and has a distinct culture.
Its leaders had accused rulers from Andhra for doing injustice to the region in all sectors and going back on the assurances given at the time of the merger.
Tuesday's decision brought down the curtains on the controversial and violent movement for separate state.
During the 'Jai Telangana' movement in 1969, over 300 people, mostly students, were killed in police firing.
With this, the central government has fulfilled its Dec 9, 2009 announcement to initiate the process for forming Telangana state.
The statement followed an 11-day hunger strike by TRS chief K. Chandrasekhara Rao and massive protests that engulfed the region.