The idea of establishing a Textile Institute of world fame was conceived by a group of visionary industrialists in 1954. To realize this idea the Government of Punjab joined hands with the leading textile industrialists to form an Institute of Textile Technology in Faisalabad (then Lyallpur) and provided sixty-two acres of state owned land free of cost. Kohinoor Industries, Colony Textile Mills, Dawood Foundation and Lyallpur Cotton Mills provided funds to the tune of Rs. 2.5 millions, which were utilized for the construction of building and provision of other infrastructure. The Government of U.K. provided the bulk of equipment and machinery, along with the services of experts under Colombo Plan.Field Marshal Muhammad Ayub Khan, the then President of Pakistan, laid the foundation stone of the Institute, on the 12th of October 1959.