Information Technology Minister K. Tarakarama Rao launched the service with a live video call with union IT and Telecommunications Minister Ravishankar Prasad.
Under this initiative, citizens around the lake will be have access to Internet with a speed of 10Mbps.
A similar service was earlier rolled out in Hitec City, the IT hub in Hyderabad.
Under Hyderabad Wi-Fi project, citizens can avail free Wi-Fi service for first half an hour and subsequently on a chargeable basis.
Rao said Hyderabad Wi-Fi project was uniquely positioned to enable the fastest Wi-Fi Hot Spot using the readily available optic fibre cable network of around 4,000km.
The state government plans to provide Wi-Fi services at over 2,000 locations in Hyderabad and about 50 Villages in the state in the first phase in next six months.
Jayesh Ranjan, secretary, IT, said initiative is the precursor to make Hyderabad a smart city. With the Wi-Fi project, the city will join the league of international cities like San Francisco, Barcelona and London.
The government also plans to connect all major district headquarters the state with Wi-Fi.