The idea of establishing a textile institute was conceived by a group of industrialists in 1954. To realize this idea, Government of the Punjab joined with textile industrialists to form the Institute of Textile Technology in Faisalabad (then Lyallpur) and provided 62 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 million, which were used for the construction of building and provision of other infrastructure. The government of the UK provided the bulk of equipment and machinery, along with the services of experts under the Colombo Plan. Field Marshall Muhammad Ayub Khan, then president of Pakistan, laid the foundation stone on 12 October 1959.