The shrine is being built by Manoj Tiwary, a local film star, and will be opened to the public early next year.
Tendulkar retired from international cricket following India's victory over the West Indies in a Test in Mumbai last week.
Shortly afterwards he was awarded the country's highest civilian honour, the Bharat Ratna.
Many of his fans in India describe Tendulkar as the god of cricket.
On Tuesday, Mr Tiwary inaugurated the 5ft 6in (167cm) deity of Tendulkar amid prayers at the site of the proposed temple in Atraulia village in Bhabhua district in Bihar.
The idol of the star, sporting a blue jersey with the World Cup in his hand, is made of marble.
The 6000 sq ft (557 square metres) temple will cost seven million rupees ($112,464; Â£69,805) and will contain idols of other cricketers such as Indian captain MS Dhoni and star batsman Yuvraj Singh.
Mr Tiwary hopes that Tendulkar will inaugurate the temple when it is ready.
"I decided to build the temple in my village soon after India won the World Cup cricket in 2011", he told the BBC.
"The temple will provide an opportunity to the lovers of cricket from around the world to pay their respects to these cricketers who are nothing short of gods in India."
Tendulkar bowed out of international cricket after his 200th Test match - 24 years and one day after his first.
He played in 664 international matches, scoring 34,357 runs and making 100 centuries. He scored almost 2,500 more Test runs than the second-placed batsman, Ricky Ponting.
Indian cricket legend Sachin Tendulkar might soon be worshipped in a temple planned in his name in Bihar state.