The Defence Acquisition Council, chaired by Defence Minister Manohar Parrikar, gave in-principle approval for the Rs 800-crore project.
Four mobile surveillance stations will also be set up and they will be integrated with the Vessel Traffic Management System (VTMS) in Gulf of Kutch and Khambatt, Defence Ministry sources said.
A total of 46 radar stations have already been set up under the first-phase of the 'static sensor chain' project for gap-less electronic surveillance along the coastline.
India had decided to significantly strengthen its coastal surveillance following the Mumbai terror attacks in 2008.
The DAC also cleared a proposal to set up an integrated engine repair facility for Naval Mig-29K fighter jets at naval aircraft yard in Goa, the sources said.
The meeting is also understood to have deliberated on a number of other initiatives including procurements.
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