The army's Border Road Organisation (BRO) said the 219-kilometre (135.7-mile) road will connect Afghanistan's crescent-shaped Highway One from the Afghan town of Delaram near Herat to the Iranian border.
BRO Director-General Lieutenant General Ranjit Singh said work on the 3.7-billion-rupee (84 million dollars) project will start in August and will last three years.
New Delhi has said the planned road is part of Indian aid package for the reconstruction of Afghanistan, shattered by wars since the 1979 Soviet invasion.
"It will be a difficult project but not the most hazardous," Singh told reporters.
Highway One, currently being constructed by a Japanese company, will provide an upgraded link between Kabul and the main western city Herat via Kandahar.
Road-building in Afghanistan is hampered by the hundreds of thousands of unmapped mines which litter the country and attacks on roadworkers by suspected Taliban loyalists.
The general said 30 Indian paramilitary troopers will provide security, adding that the BRO, which has built roads in some of India's most violent regions, will also hire local guards.
The Indian military also plans to recruit up to 4,000 local Afghan workers to foster goodwill.
Once completed, the road would open a gateway to two Iranian ports via the frontier Zaranj region, the general said.
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