  Based on first-principle calculations and $k\cdot p$ model analysis, we show
that the quantum anomalous Hall (QAH) insulating phase can be realized in the
functionalized hematite (or $\alpha$-Fe$_2$O$_3$) nanosheet and the obtained
topological gap can be as large as $\sim$300 meV. The driving force of the
topological phase is the strong interactions of localized Fe 3$d$ electrons
operating on the quadratic band crossing point of the non-interacting band
structures. Such interaction driven QAH insulator is different from the single
particle band topology mechanism in experimentally realized QAH insulator, the
magnetic ion doped topological insulator film. Depending on the thickness of
the nanosheet, topological insulating state with helical-like or chiral edge
states can be realized. Our work provides a realization of the
interaction-driven QAH insulating state in a realistic material.
