The Indian Ministry of Defence's (MoD) Defence Acquisition Council (DAC) has approved the $4.5bn purchase of Russian S-400 Triumf air defence missile system.
Sources close to the matter were quoted by media sources as saying that the two countries will now begin negotiations for purchase of the systems.
A deal may or may not be finalised, while a decision is likely to be announced following Indian Prime Minister Narendra Modi's scheduled visit to Moscow from 24 to 25 December.
However, a MoD source was quoted by DefenseNews as saying that response from Russia is 'lukewarm'.
According to an IAF official, the Indian Air Force will bolster its capability to strike multiple targets, including ballistic missiles and stealth aircraft with the S-400 systems.
An upgraded version of the S-300 missile system, the S-400 Triumf is a long-to-medium-range, surface-to-air missile system, and is designed to intercept a range of ground-based and airborne targets, including stealth aircraft, strategic carriers, and cruise and ballistic missiles at a distance of 400km.
Code-named the SA-21 Growler, the system has been developed by Almaz/Antei Concern and features three different missiles, including the extremely long-range 40N6, 48N6 long-range and a 9M96 medium-range missile.
According to the news agency, the system is expected to form the cornerstone of Russian air and missile defence by 2020.
Last November, Russian state-arms-exporter Rosoboronexport and the Chinese Defence Ministry signed a $3bn contract for the supply of at least six S-400 battalions.