The event fulfils a long-standing promise by Modi and his Hindu nationalist party and marks the first anniversary of another commitment delivered by his government, the end of special privileges for India's only Muslim-majority state of Jammu and Kashmir.
Modi, clad in a gold kurta and white dhoti, left by special aircraft for the mega event that saw him lay a 40-kg silver brick later on Wednesday to mark the symbolic start of the grand temple at what many believe is the birthplace of Lord Ram, according to Indian news broadcaster NDTV.
"Usurpation of the land by an unjust, oppressive, shameful and majority-appeasing judgment can't change its status," the All-India Muslim Personal Law Board said on Twitter. "No need to be heartbroken. Situations don't last forever."
Yellow flowers decorated the freshly washed area around a temple on the banks of the Sarayu River where Modi will offer prayers before heading to the construction site at noon on his first such visit since becoming prime minister in 2014.
Numerous security officials guarded Ayodhya, crowded by thousands of people, few wearing masks against the coronavirus, although social distancing measures to limit its spread will allow only about 200 to gather at the main event site.
The chant of prayers resounded through the city, located about 687 km (427 miles) southeast of the capital New Delhi, as devotees and monks thronged its numerous ancient temples in celebration.
Event organisers gathered soil from more than 2,000 holy spots and water from over 100 rivers for use in prayers at the start of the building work, while a Ram devotee from southern Tamil Nadu state has donated two bricks of precious metal.