"Bantony Estate will be converted into a museum and will be named Museum of Shimla," the chief minister told reporters.
He said the process to acquire the building, which was once the summer palace of the erstwhile maharaja of Sirmaur, would be completed soon.
Official sources said the museum would display the grand history of Shimla.
A notification to acquire Bantony Estate near Scandal Point on Shimla's famous Ridge, a heritage zone in the heart of the town, was issued by the government Saturday.
Singh said the original structure would not be demolished.
"It would be restored and renovated in its original architecture," he said.
The state cabinet, headed by the chief minister, decided July 5 to acquire the castle where the coat-of-arms of the maharaja can still be seen in the cast iron railing.
The government initiated the property acquisition process under Section 4 in the Land Acquisition Act, 1894, said an official.
During the tenure of the previous BJP government, a London-based Indian businessman had tried to purchase the property for an ultra-luxurious spa.
Officials said the government had made three attempts between 1968 and 1996 to acquire Bantony Estate but the owners of the castle had resisted such attempts.
Vishwanath Sood, 72, one of the owners of the building, said the property was worth crores.
"If the government is keen on acquiring it, it should pay us the prevalent market rate. If it goes ahead with the acquisition as per law, I have no problem. Otherwise, I have the right to challenge it," he said.
Like many buildings in Shimla, Bantony's architectural style is somewhat eclectic -- part mock-Tudor, part chalet and crowned with sloping roofs with mini-towers. Architect T.E.G. Cooper is said to have designed it.
Before its construction in 1880, the place had a rickety cottage belonging to Captain A. Gordon, which housed army officers.
--IANS (Posted on 27-11-2013)