The Nanded airfield was built in 1958 by the Public Works Department and has the distinction of being the first airport in the Marathwada region. However, it remained under-developed for many years being served only for a short while by Regional carrier Vayudoot in the early 90s. In April 2000, the Maharashtra Industrial Development Corporation took over the development and maintenance of the airport.
To push trade in the region, the Maharashtra State Industries Ministry initiated the process of modernisation of airports operated by MIDC in 2006. Tenders were floated to invite private parties to draw out a plan for airport operations. as a result of which, the airport was leased to Reliance Airport Developers, a subsidiary of Reliance Infra that undertakes project management, implementation and operation of airports, who currently operate the airport. 
In 2008 the airport was upgraded at a cost of Rs. 940 million. A new terminal complex, complete with an apron measuring 290 m x 120 m was constructed on the north side of the runway to accommodate three parking bays for large aircraft with fueling stations and CAT V and CAT VI Airport Fire Fighting & Rescue Service.
While the New terminal building, capable of handling 300 passengers at peak hours, featured six check-in counters, VIP Lounges, Departure and Arrival Lounges, Transit Suites & Snooze Cabins, Visitors Waiting Area and Cafeteria, the airside saw drastic improvements too. The sole runway was extended from 1375 metres to 2300 metres. Runway width was also increased by 15 metres to 45 metres, making it capable of handling larger aircraft such as the Boeing 737 and the Airbus A320. A new night landing system and airfield lighting system was installed along with modern Navigational aids.
The Directorate General of Civil Aviation awarded Provisional Aerodrome Licence to Nanded Airport in Public use Category on 5 April 2010 and Permanent Licence on 1 October 2010. Passenger traffic at Nanded airport in FY 2011 Q2 increased to almost 5,700 per month from 3,000 in the previous quarter.