A statement from the Indian Space Research Organisation (ISRO) said the satellite, named Resourcesat-1 would be launched by the locally-built Polar Satellite Launch Vehicle from the southern state of Andhra Pradesh.
"The preparations are in the final stages for the launch," the ISRO statement said.
The announcement coincided with China's launch of a manned space mission on Wednesday.
India has a keen space rivalry with its giant neighbour and just a few days after China said in January it would send a man into orbit, Indian Prime Minister Atal Behari Vajpayee publicly urged his country's scientists to work towards sending a man to moon.
Last month the Indian cabinet approved a proposal by space authorities to send an unmanned mission to the moon by 2008.
Resourcesat-1 is India's most sophisticated remote sensing satellite so far and it will provide continuity to the services of other remote sensing satellites that have far outlived their mission lives.
India currently has four remote sensing satellites in orbit.