The public entity has remained closed since 2011 after it incurred massive losses, the The Himalayan Times reported.
The company had reported a cumulative loss of NPR485.85m ($6.64m) until the end of last fiscal year (2009-10), according to the Finance Ministry.
The Public Accounts Committee (PAC) under the Legislature Parliament in August 2011 had recommended the government to opt for a merger between Nepal Drugs and Herbs Production and Processing Corporation and Singhdurbar Baidhyakhana.
Finance Ministry Joint secretary Khum Punjali said the cash-strapped company will receive NPR50m to start production.