Prime Minister Narendra Modi announced in August that India will launch a manned space flight by 2022 with at least one astronaut. The cabinet had not approved the project, however.
There will be two unmanned and one manned flight to launch the Gaganyaan (Sky-Vehicle) Program, the statement said.
Without giving a date for the blast off, the government said the manned flight would be “within 40 months” of Friday’s meeting.
Modi has hailed the national space program as a prestige project.
The government has stated that space flights will boost the economy, generate jobs and enhance capabilities in areas such as medicine, agriculture, and fighting pollution.
A successful manned mission would allow India to become a “collaborating partner in future global space exploration initiatives with long-term national benefits,” said the statement.
The country has invested heavily in its space program in the past decade.
The Indian Space Research Organisation announced in July that it planned to send an unmanned mission to the moon in 2019.
India launched an orbiter to Mars in 2013, which is still operational and last year launched a record 104 satellites in one blast-off.
New Delhi is competing with other international players for a greater share of the satellite market and hopes its low-cost space program will give it an edge.
China put its first humans into space in 2003, but its Shenzhou program cost more than 2.3 billion U.S. dollars.
Experts say the United States spent the equivalent of about 110 billion U.S. dollars at current values on preparatory flights and the mission to put the first man on the moon in 1969.