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Single-storied houses measuring 1000 sq.ft will be constructed in the township.
A state government-appointed panel has also made a series of recommendations on turning landslide-prone areas habitat-free.
The state government said experts will study the possibility of reconstructing the major school in the region considering its sentimental value.
Asked whether the state government was on the right path, Khan said, "It is not a question of being right or wrong. It is a time of emergency and in this emergency, all of us stand on the same page."
Revenue Minister K Rajan said the government plans to rehabilitate those affected by the July 30 landslides in the panchayats of Meppadi, Muppainad, Vythiri, Kalpetta, Muttil and Ambalavayal in the Wayanad district.
Collector appealed people to continue support during rehabalitiation process.
In a two-part series 'Revisiting Puthumala', Onmanorama explores the lacunae in the government's compensation policy by speaking to the survivors of Puthumala landslide victims.
The announcement was made by state Revenue Minister K Rajan who is part of a Cabinet sub-committee.
The first phase comprises a clinical psychology block and a consultation and hydrotherapy block.
How a housing project of the Kozhikode Corporation has turned into a nightmare of its residents.