The MoU was signed by India's High Commissioner to Sri Lanka Taranjit Singh Sandhu and Secretary to the Ministry of Education Sunil Hettiarachchi.
The secondary school located in President Maithripala Sirisena's home district Polonnaruwa will be constructed using a grant of SLR 300 million from the Indian Government.
The project envisages construction of class rooms, laboratories and library, as well as procurement of furniture and other equipment.
"The project would also contribute to President Maithripala Sirisena's efforts to promote and strengthen reconciliation and unity in Sri Lanka," it said.