The temple, one of the surviving masterpieces of the Mon architecture, is believed to have been built around 1105 by King Kyanzittha, one of the greatest Burmese monarchs.
The temple's architecture shows Mon and Indian influence.
"Connecting with history. PM @narendramodi pays respects at Ananda Temple, the most historical and venerated temple in Bagan, Myanmar," External Affairs Ministry spokesman Raveesh Kumar tweeted.
The temple was first damaged in an earthquake in 1975, and then last year when a 6.8 magnitude quake shook Myanmar.
The ASI will also restore a number of pagodas and murals damaged in the earthquake last year.
Modi, in his address with Myanmar State State Counsellor Aung San Suu Kyi, said he was excited to visit the temple and pay tributes to the monuments of religious and historical importance.
According to a legend, King Kyanzittha built the temple after eight monks from India visited him and told him about a cave temple in the Himalayas. The vision of a snowy landscape so impressed the king that he dicided to replicate the temple in Bagan.
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