The Italian car maker had received bids for the 53 acre plot from leading developers over the past few months.
Foremost among them was the Kohinoor Group of Shiv Sena leader Manohar Joshi that is already building a township on an adjoining 38 acre plot which it bought from Premier Automobiles for Rs 90 crore (Rs 900 million) in 2005.
The Fiat property was also originally owned by Premier Automobiles, promoted by the Doshi family, which had entered into a joint venture with Fiat to manufacture cars in 1997.
Property rates in the area have shot up nearly five times in the past two years.
"The area is being looked at as an alternative to the Bandra-Kurla Complex business district, for better road connectivity, infrastructure support and healthy development in adjoining areas," a leading property consultant said. "This has boosted real estate prices in the area."
Fiat suspended operations at Kurla late last year and moved to the new plant at Ranjangaon, near Pune, where Tata Motors is a partner.
"This marks an important phase in the journey of Fiat in India as the company ushers in a new era with the transformation of its production facilities and the impending launch of new models in the country," the company said in a statement.
The Ranjangaon plant, where Palio is made, is gearing up for the production of various international models including Linea and Grande Punto. The plant will also produce models of Tata Motors. The total investment in the new plant is Rs 4,000 crore (Rs 40 billion).
Among the Fiat cars that rolled out from the Kurla facility were the Uno, Palio, Petra, Sienna, Weekend and Adventure. The Premier Padmini model, the ubiquitous taxi on Mumbai roads even today, was also made at this facility till some years ago.