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French Defence Minister Yves Le Drian finalised the deal, which will cost India Euros 7.8 billion along with his Indian counterpart Manohar Parrikar.
The negotiations to buy the Rafale fighter jets came through on Wednesday.
The development comes after the Cabinet Committee on Security (CCS) discussed the deal and gave the green signal to go ahead with its signing to give a crucial boost to the Indian Air Force.
In June, Parrikar had stated that the number of the fighter jets were "on path of coming to conclusion".
Both India and France had hoped to wrap up the strategic order during French President Francois Hollande's visit for the Republic Day celebrations in January this year, but the bargaining over the price stalled the process.
Parrikar said the two sides were yet to arrive at a decision on pricing.
"It's a big purchase, we have to be careful and every 0.1 percent savings itself is hundreds of crores. So, let the exercise be done with some patience," he said.
Hollande and Prime Minister Narendra Modi intervened in the troubled Rafale procurement last year, ordering government-to-government talks after commercial negotiations with Dassault had collapsed.
Both leaders agreed to scale back an original plan to buy 126 Rafale planes to just 36 in fly-away condition to meet the Indian Air Force's urgent need as it faces an assertive China and long-time foe Pakistan.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)