The Tibetan Market, in northern part of the capital, is among the areas that are the worst-affected during floods.
"The wall will cover a length of 1,100 metres and shall have raft slab foundation supported with piles," said Irrigation and Flood Control Minister A.K. Walia.
He expressed hope that with the construction of the wall a large number of inhabitants and shopkeepers of the market will be saved from inconvenience and losses due to annual floods of the Yamuna river.
The estimated cost of the construction is Rs.10.61 crore and the project would be completed within a period of 15 months after sanctions.