Abstract. The M.P. Council of Science and Technology (MPCST), Bhopal has initiated a project to establish an astronomical observatory at Dongla, Ujjain. This place is situated exactly on the tropic of cancer (longitude 75o45'45.5''E and latitude 23;o 26'43.2''N), and was the center of ancient Indian astronomy over several hundreds of years. The place is relatively dark, having moderate seeing and is found to have a large number of clear nights during September-April months. The proposed observatory will have mid-size robotic Optical Telescope equipped with large format CCD imaging camera. The science driver for the observatory is to continuously monitor a variety of variable stars and the transient objects. The telescope is primarily expected to be used by astronomers from the Indian universities, however, one quarter of the telescope time would be available to astronomers from other national institutes. The project work has already started and the observatory is supposed to see the first light some time during June