The Union Cabinet on Friday approved Gaganyaan programme, giving a boost to India's space mission.
The indigenous human spaceflight programme will carry three member crew for minimum seven days into space.
The programme will cost 10k crore to the government.
India will be the fourth country after the USA, Russia and China to send humans to space.
Indian Space Research Organisation (ISRO) will launch its manned space mission in 2022, and the space agency displayed the Gaganyaan crew model and space suits in September.
ISRO's chief K Sivan had revealed in November that the agency had set a target of achieving the country's ambitious manned mission to space by 2021, with the first unmanned programme of 'Gaganyaan' planned for December 2020.
A human-rated GSLV Mk-III will be used to carry the orbital module which will have necessary provisions for sustaining a 3-member crew for the duration of the mission, a government statement said. The programme, will demonstrate Indian Human Spaceflight capability to low earth orbit for a mission duration ranging from one orbital period to a maximum of seven days.
ISRO, which will select the three-member crew in association with the Indian Air Force, has already completed the development of launch vehicle GSLV Mk-lll.
Prime Minister Narendra Modi announced the ambitious project from the ramparts of Red Fort during his speech on Independence day in 2015.
From testing medical equipment in space to micro-biological experiments such as biological air filters and biosensors, and from life support and biomedical waste management to monitoring toxic gases, Isro is looking at a pool of at least 10 experiments.