The Saroj Khan Dance Academy is a joint-venture between Khan and her local partner, Pen 'N' Camera (M) Sdn Bhd.
"Fans can look forward to more of the glitter of Bollywood, " The Star said Monday.
It described Tabu as "the leggy beauty" who won critical acclaim for her role in a number of films including "Chandni Bar".
Saroj is best known for her sultry dance movements in hit movies like "Devdas", "Guru", "Veer-Zaara" and "Taal". In the entourage besides Tabu are Nagma, Ravi Kishen and Shakti Kapoor.
The Saroj Khan Dance Academy, which is located in Sea Park, Petaling Jaya, offers a four-month diploma programme in dancing, acting and singing.
Students of the dance academy will also be given the opportunity to act as back-up dancers for Hindi films that will be shot in Malaysia.
Indian films from Bollywood are extremely popular in Malaysia, where there are 1.7 million ethnic Indians.
Bollywood megastar Shah Rukh Khan, who had earlier shot two films here, was conferred the title of Datuk, a knighthood, by the Sultan of Malacca last year.