The contract for 145 BAE Land Systems howitzers with laser inertial artillery pointing systems, spare parts and support and test equipment is expected to be worth $885 million, the DSCA statement said.
It will also end a 25-year procurement saga by India to purchase howitzers.
BAE Systems, Watervliet Arsenal, Seiler Instrument Co., Triumph Actuation Systems, Taylor Devices, Selex and Hutchinson Industries will be prime contractors for the sale, the DSCA note said.
The prime contractors are expected to negotiate offset deals, in accordance with the Indian Defense Procurement Procedure, for some manufacturing and servicing within India.
India's Defense Acquisition Council cleared the purchase in May 2012 following a comprehensive evaluation.
The self-propelled M777 can deliver as many as five shells per minute to around 15 miles with unassisted rounds and more than 18 miles with rocket-assisted rounds.
If the sale goes ahead, it will "exorcise" the "Bofors ghost" by inducting the army's first modern 155mm howitzers since a procurement scandal in the mid-1980s, a report by The Times of India reported in May 2012.
That month the council, led by Defense Minister A.K. Antony, cleared the purchase of 145 M777 .39-caliber ultra-light howitzers from the United States in a direct government-to-government deal worth $647 million under the Foreign Military Sales program.
The final contract will be led by prime contractor BAE Systems, which now owns Bofors, The Time of India reported.
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 continued 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.
In March 2012, the Indian Express reported the army ordered 100 smaller caliber howitzer artillery pieces to be made by the Ordnance Factory Board, in Kolkata, West Bengal state.
Indian Defense Minister M.M. Pallam Raju said the government is looking for a mix of towed, self-propelled and ultra-light howitzers.
The 100-howitzer deal was the first artillery gun contract for nearly 20 years, since the Bofors scandal, the Indian Express noted.
OFB was set up by the government in 1979, incorporating more than three dozen private and public domestic ordnance sales and manufacturing companies.
The board has been supplying the army with howitzer spares, including muzzles, loading troughs, recoil systems and breach mechanism.
The OFB also makes Vidhwansak, AK-47 and INSAS rifles, sport guns, various types of military vehicles and other defense equipment such as parachutes and propellants.
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