This was announced after Prime Minister Manmohan Singh held talks with his Canadian counterpart Stephen Harper on the sidelines of the Commonwealth Heads of Government Meeting (CHOGM).
Harper said, "We have now got an agreement which means this is a tremendous opportunity for both countries."
"Canada is a supplier, obviously an integrated supplier in the nuclear energy field and India is an expanding economy that has great energy needs," Harper said.
Lauding Harper for giving a political push to the negotiations, Manmohan Singh said, "This is a tribute to the prime minister's great leadership and the way the civil service functions in Canada."
"It augurs extremely well for the development of our relations," he added.
The nuclear agreement promises to transform bilateral relations that turned frosty when Ottawa cut off atomic trade after New Delhi's 1974 nuclear test and accused the latter of misappropriating Canadian reactor designs in the test.