Prince Manvendra Singh Gohil, the heir of the Maharaja of Rajpipla in Gujarat, is set to open a centre with his Lakshya Trust charity at his 15-acre compound in Hanumanteshwar.
Vulnerable LGBT people will be able to seek refuge as well as take English or computing lessons and make use of medical facilities.
The campaigner, who was shunned by his family after coming out more than a decade ago, started his charity to raise awareness about the prevention of HIV and Aids.
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Prince Manvendra told the Times of India: "It has been a long-cherished dream of mine to build this centre and work is already in progress at Hanumanteshwar."
He added: "People belonging to the sexual minority, including those who are often thrown out of their homes, can take shelter here."
The royal, whose coming out resulted in effigies of him being burned in his home state, said he planned to "empower the community" with his latest project so people did not have to rely on their families to survive.
He told the International Business Times: "In India, we have a family system and we are mentally conditioned to be with our parents.
"The moment you try to come out you are told you will be thrown out and society will boycott you. You become a social outcast. A lot of people are financially dependent on their parents.
"I want to give people social and financial empowerment, so eventually people who want to come out won't be affected. They will have their own social security system. It won't make a difference if they are disinherited."
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The move comes as India's chief justice Dipak Misra said judges would reconsider the law following a petition filed by a group which says it is living in fear of being prosecuted.
Activists are remaining hopeful after a New Delhi High Court declared Section 377 of India's law unconstitutional.
The law, drawn from the colonial period, states intercourse between members of the same sex is "against the order of nature".
However, the ruling was overturned by the Supreme Court four years later.
