Parts of the coastal and southern regions are shut. Schools are closed and transport is thin.

With a population of 35 million, Telangana comprises 10 of Andhra Pradesh's 23 districts including Hyderabad, India's sixth biggest city.

The state has seen protests for and against the proposal in recent years.

Backers of the new state say the area has been neglected by the government.

Opponents of the move are unhappy that Hyderabad, home to many major information technology and pharmaceutical companies, will become a shared capital for 10 years.

Wednesday's strike comes a day after India's ruling Congress-led coalition unanimously agreed to the formation of the new state.

It has been called by the United Andhra Joint Action Committee which has opposed the division of the state. Some local Congress party members have also opposed the split.

A total of 13 districts in the coastal and Rayalaseema regions have been affected by the strike, says the BBC's Omer Farooq in Hyderabad.

Businesses, schools and cinema theatres are closed and public transport system has been disrupted, leading to many passengers being stranded.

Protesters have blocked trains in Nellore and roads and highways in other districts. They have staged demonstrations outside the houses of ruling Congress party ministers and politicians.

Four lawmakers, including three from the Congress party, belonging to the state assembly have resigned in protest against the move, our correspondent says.

Hundreds of paramilitary troops have been deployed to prevent any violent protests after Tuesday's announcement.

The final decision on a new state lies with the Indian parliament. The state assembly must also pass a resolution approving the creation of what will be India's 29th state.

Correspondents say the timing of the announcement is linked to general elections due early next year. Recent opinion polls have shown that the Congress party is struggling in the state, which has 42 parliamentary seats.

Deep divisions have emerged over the Telangana issue in the past four years.

In December 2009, India's Congress party-led government promised that the new state would be formed, but later said more talks were needed.

The Telangana campaign grew in strength that year when veteran politician K Chandrasekhara Rao went on a hunger strike for 11 days in an effort to press the government to agree to its creation.

Demand for Gorkhaland

Meanwhile, the main Gorkha ethnic group in India's West Bengal state has stepped up its demand for a separate state for Nepali-speaking Gorkhas in the tea-producing Darjeeling hills, reports Subir Bhaumik from Calcutta.

A Gorkha youth has set himself on fire to protest against Delhi's alleged "dual policy" - one of overlooking Gorkha aspirations for a separate state while going ahead with the creation of Telangana.

"His condition is serious," said Roshan Giri, leader of the Gorkha Janamukti Morcha (GJM), which is leading the movement for the separate state.

"Now that Delhi is creating Telangana, it should consider our long-term aspirations for a separate Gorkhaland. Our region is totally different from West Bengal which is a Bengali dominated state," he said.