Step 1: Understanding the Concept:
This question focuses on the geographic distribution of recently designated wetlands and protected bird habitats in India.
Step 2: Detailed Explanation:
Kazhuveli (also spelled Kaliveli) is a massive brackish water wetland located in the Villupuram district of Tamil Nadu.
It is situated along the east coast near the Bay of Bengal.
In December 2021, the Government of Tamil Nadu formally declared this wetland as the state's $16^{\text{th}}$ bird sanctuary.
This ecosystem is a vital stopover site along the Central Asian Flyway.
It hosts thousands of migratory waterbirds, including various species of pelicans, storks, and ducks.
It also plays a crucial role in preventing local coastal erosion and recharging regional groundwater reserves.
Step 3: Final Answer:
Kazhuveli Wetland Bird Sanctuary is located in the state of Tamil Nadu.
This matches Option (D).