Worldwide microalgae have been known for their wide industrial applications since many centuries, but large scale cultivation of algae in photo bioreactors is still having many constraints with regards to construction cost, system dimensions, culture sustainability and productivity. Algal feedstock production is impended by failure of translation of laboratory studies to field scale ups. The present research work deals with the construction of the low cost flat panel photobioreactor system and optimization of operational strategies. The microalgal strain selected for mass cultivation is an indigenous halophilic Pseudanabaena limnetica species, which sustains at high temperature and light intensity of summer season and it could be grown in marine water. Therefore, actual seawater has been utilized for cost effective biomass production. Flat panel photobioreactor was scaled up from 8 L to 250 L. Three airlift panels with dimensions of: length × height × breadth as 25 cm × 38 cm × 10 cm (8 L), 50 cm × 70 cm × 20 cm (60 L) and 100 cm × 110 cm × 28 cm (250 L) have been developed. The optimization of air flow rate and sparger pore size was conducted. Physical parameters like, Sparger velocity (ν) m/s along with change in Reynolds number (Re), superficial velocity of gas (Usg), gas holdup (ɛ) were studied for their efficiency to support algal growth. Also optimization of other important parameters like light intensity, inoculum size was carried out in laboratory condition and correlated with the biomass production. After optimization each PBR was operated in outdoor conditions. Electric power consumption, its cost estimation, total biomass productivity and operational feasibility of the developed photobioreactor system were also discussed. After optimization of operational strategy for working of photo bioreactors in laboratory and outdoor conditions, 60 L flat panel photobioreactor was found to be most suitable for large scale cultivation of P. Limnetica. Therefore attempts have been initiated to construct and assemble the 1000 L photobioreactor system.