The launch of the programme comes amid increased competition - TV software company UTV is launching a kids' channel, Hungama TV, while Turner International has introduced Pogo, a 24-hour children's channel.
However, Nickelodeon is hitting back at new rivals with increased Hindi-language programming and locally produced shows, of which Nick takes over your room is the most ambitious.
"We did a campaign two years ago to find a host for a special programme series - Say Please - and that had similar elements. We're finding that non-traditional children's advertisers are interested in these unique properties," said Lucy Young, vice-president, marketing and communications, Nickelodeon Asia-Pacific. "As we are taking over a room in a home, it was a natural fit for Asian Paints as they have come out with a line of paints which are very kids-themed specific."
The programme will air in September on the channel's India feed after a winner is voted by viewers from a pool of five finalists from New Delhi, Chennai, Bangalore, Mumbai and Hyderabad.
The campaign, which included on- and off-air promotions and was open to kids 14 years old or younger, recently completed auditions that saw 3,000 kids register.
The auditions took place at a LifeStyle department store and featured kids dancing to Bollywood songs, playing tabla, cartwheeling and re-enacting film scenes.
Five vignettes will be created of the finalists and will air on the channel for viewers to vote for the winner. The winner will have Asian Paints do up their room, while LifeStyle will give away a bunk bed and Samsung a camcorder.
A one-hour show special with two repeats will be created featuring the winner.
The launch of the show follows Nickelodeon signing on as part of The One Alliance - a group of channels including Sony Entertainment Television, Discovery Channel and HBO - which leverages distribution strengths for all its members.
The channel has also created an English-language website, nicksplat.com.
The site is packed with content targeted at kids, such as character bios, event news, an online community, downloads and web-exclusive contests.