The state governor Babajide Sanwo-Olu made the announcement while addressing journalists at the scene of the explosion on Monday.
Sanwo-Olu added that the sum of N250million will be released immediately and urged well-meaning Nigerians and organisations to contribute to the fund.
The governor also announced that an investigative committee has been set up to look into the incident behind to be headed by the deputy governor, Obafemi Hamzat.
The committee has been given two weeks to do an extensive investigation into the cause of the incident and what needs to be done to ensure that this does not repeat itself again.
Members of the committee include Commissioner for Special Duty as the co-chairman; Commissioner for Education; Commissioner for Finance; Commissioner for Environment; Permanent Secretary; the Ministry of Health, Permanent Secretary; Works and Infrastructure; the Commissioner of Police or the Deputy Commissioner of Police will also be part of the committee.
Others include the Senior Special Assistant on Security; Chairman of the Local government; Representative of the CDC and CDA; Representative of St. Bethlehem Girls college; Commissioner for the Ministry of Physical Planning; Representative of the NNPC; National Emergency Management Authority (NEMA), and two representatives of the host community.
Governor Sanwo-Olu also revealed that he will be meeting with President Muhammadu Buhari later to ask for his assistance.