The Defence Acquisition Council headed by Defence Minister A K Antony cleared the deal and it will now go to Cabinet Committee on Security for the final approval, sources said.
The DAC also cleared a proposal for placing an order for 235 T-90 tanks worth Rs 6,000 crore with the Ordnance Factory Board. These battle tanks would be manufactured under the Transfer-of-Technology agreement India has signed with Russia.
The Indian Air Force already has six C-130J planes, which it had acquired at a cost of around 1.06 billion USD and are deployed at its Hindon airbase.
The new lot of six planes will be located at Panagarh in West Bengal, which would be headquarters of the proposed Mountain Strike Corps of the army along the China border.
The CCS had cleared the army's proposal for raising the Corps, which is expected to cost Rs 62,000 crore, in its meeting on July 17.
Like the first lot, the purchase of six more aircraft will be through the foreign military sales route between India and the US governments.
The aircraft is capable of airdropping commandos and material in darkness due to its night-vision imaging. It can prove very handy in wartime due to its ability for special air operations and transport of material and supplies.
During peacetime, it can be used in mountainous terrain in hostile circumstances. The four-engine plane with Rolls Royce engines has the technology and configuration to perform low-level precision flying.
It was recently used in rescue operations in flood-hit Uttarakhand.