The plant in western Gujarat state will be inaugurated by the state's chief minister Narendra Modi and Tata group chairman Ratan Tata later in the day, a company spokesman said.
Tata Motors had originally chosen Singur in communist-ruled West Bengal as the main plant to produce the Nano, but had to scrap the nearly complete factory in 2008 over a bitter land ownership dispute.
The Nano, which has so far sold 35,000 models, has until now been made at Tata factories elsewhere in India.
The Nano, which was launched with great fanfare last July, costs as little as 100,000 rupees (2,150 dollars) and is pitched at India's aspiring middle classes, many of whom currently travel on two-wheelers.
India and its 1.2-billion-strong population is a huge draw for carmakers across the world because of its low car ownership and a rapidly expanding number of affluent consumers.
Just 13 per 1,000 people own a car in India, compared with 550 per 1,000 in Germany and 495 in France.
The new plant in Sanand, Gujarat, has the capacity to manufacture 250,000 units annually, and aims to increase production to 500,000.
The Nano has sparked a race to create other low-cost cars for the Indian and other emerging markets.(English News Team)