Indian Minister of State for Defense M.M. Pallam Raju confirmed the order is for the 155mm, .52-caliber model, a report by the online news site Indian Express said.
Raju also said that bids for artillery guns including towed, self-propelled and ultra-light howitzers will be open to all manufacturers, foreign and domestic under $4 billion artillery modernization program.
Up to 40 towed guns will be ordered as well as 180 self-propelled and145 ultra-light guns, the Indian Express report said.
OFB was set up by the government in 1979, incorporating more than three dozen private and public domestic ordnance sales and manufacturing companies.
OFB has been supplying the army with howitzer spares, including muzzles, loading troughs, recoil systems and breach mechanism. The company also makes Vidhwansak, AK-47 and INSAS rifles, sport guns, various types of military vehicles and other defense equipment such as parachutes and propellants.
The 100 howitzer deal is the first artillery gun contract for nearly 20 years, since the Bofors scandal. Senior politicians, including former Prime Minister Rajiv Gandhi, were accused of receiving kickbacks from arms manufacturers in return for paying inflated prices for Bofors guns.
India's Central Bureau of Investigations continues to look into the Bofors affair despite no major successful prosecutions.
Rumors of scandal were partly responsible for the electoral defeat of Gandhi's ruling Indian National Congress Party in the November 1989 general elections.
In 2004, the Delhi High Court quashed charges of bribery against several people, including Gandhi, who was assassinated in 1991.
Last week, Raju said the government is progressing with moves to sell some shares in the state-owned Hindustan Aeronautics Limited, the Press Trust of India reported.
"The will of the government is there for disinvestment," Raju said.
HAL is gearing up for the disinvestment process but the exact timing of the initial public offering of shares must be decided by Ministry of Defense and the Department of Disinvestment, a HAL official told PTI.
Raju's announcement of the howitzer deal comes as India's negotiations continue with French aircraft manufacturer Dassault for 126 Rafale jet fighters worth around $10 billion, a report by the Press Trust of India said.
"Decision is final as far as selection is concerned," said Raju.
Dassault was the low bidder, edging its main rival EADS with its Eurofighter Typhoon, a report in The Times of India said last month.
India's decision to opt for Dassault is a further blow to EADS. In late December EADS lost out to Lockheed Martin's fifth-generation fighter F-35 Lightning II.
Japan will buy 42 F-35 fighters over the Boeing F/A-18 Super Hornet in a deal estimated at around $7 billion.
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