The Army wants to buy the Spike missile as a "stop gap" measure before the Defence Research and Development Organisation can come up with an indigenous anti-tank missile of its own within the next three years.
The purchase proposal is at an advanced stage and is awaiting government approval, the person said, without giving any details. They asked not to be identified as the information is not yet public.
The order for the anti-tank guided missile, made by Israeli firm Rafael Advanced Defense Systems Ltd., could be placed this year to meet the army's urgent requirements, the person said.
A Rafael spokesman in Israel confirmed that a potential deal is under discussion, but wouldn't comment further until something is signed.
The decision came just ahead of a visit to New Delhi by Israeli Prime Minister Benjamin Netanyahu, who raised the cancellation with Prime Minister Narendra Modi during bilateral talks. Netanyahu later told reporters the deal was back on.
India abandoned the contract after its Defence Research and Development Organisation promised to deliver an indigenous anti-tank missile to meet the Army requirement of over 8,000 anti-tank missiles.
The DRDO has promised to deliver the India-made missile for trials by the end of 2018. Once the trials are successful, the Indian anti-tank missile would go in for mass production by 2021.
Election Results for Lok Sabha Election 2019 will be out on May 23. Get the latest election news and live updates on ndtv.com/elections. Catch all the action on NDTV Live. Like us on Facebook or follow us on Twitter and Instagram for news updates from each of the 543 parliamentary seats for the election 2019