India would buy 80 medium-lift Mi-17 helicopters from Russia for Rs 6,500 crore.
The Cabinet Committee on Security (CCS) approved the proposal on Tuesday.
The CCS's decision to buy the choppers and renegotiate the terms of the Gorshkov aircraft carrier deal came two days before the arrival of Russian President Dimitry Medvedev to India.
Prime Minister Manmohan Singh will host Medvedev, who lands in New Delhi on Thursday, to a private dinner before having formal talks with him on Friday.