Azharuddin who played the young Salim, pictured at his old home
Two child actors from the film Slumdog Millionaire will be moved from slums to new houses by Indian authorities.
Rubina Ali and Azharuddin Ismail, who played young versions of two main characters, were discovered by casting agents in Mumbai's Garib Nagar slum.
There was an outcry when it was found they were still living there after the success of the Oscar-winning film.
An official said the children had "brought laurels to the country" and deserved to be rewarded.
Local housing association chairman Amarjeet Singh Manhas added: "Since the children have made the nation proud, they must be given free houses.
"The chief minister of the state has approved this."
The housing will come from a small allocation which local politicians are allowed to distribute as they see fit.
Both children were flown to Los Angeles to attend the Oscars
Rubina, nine, is currently living with her family in a one room shack while 10-year-old Azharuddin's family home, located under a tarpaulin by a busy road, was recently demolished.
The boy's father, Mohammed, who suffers from tuberculosis, told The Times of India: "We have barely got any money from the film-makers. In fact, whatever came, has already been spent.
"This decision is a piece of good news for us.''
Rubina's father Rafiq Qureshi also told the newspaper: "Our house was demolished a couple of times by the authorities, the last time being three months ago.
"We are happy that we will have a permanent roof over our head.''
Gautam Chatterjee, vice president of the Maharashtra Housing Area Development Authority, confirmed making the recommendation to the state authorities.
But he told the BBC he could not say how long it would take to process.
The two children were paid above local wages for 30 days of work on the film and director Danny Boyle has strongly denied charges of exploitation.
Funds have been set up to pay for their education and they have been enrolled in school for the first time.
The film-makers also promised to provide bricks and mortar housing for the two families before authorities stepped in with their offer.
Critics called the housing gift a political move ahead of a general election, Indian media reported.
Around half of Mumbai's population live in slums and authorities in the state of Maharashtra have long been under pressure to improve conditions there.