The project will involve a cost of Rs 1899.72 crore.
It will be implemented with an aid of Rs 1701.98 crore from the Japan International Co-operation Agency (JICA), with the state government contributing the remaining share.
The project is aimed at expanding forests to bring about ecological restoration and facilitating livelihood improvement of inhabitants of the villages by afforestation.
Forest Minister B Ramanath Rai said the state Cabinet has approved the project and a detail project report would be sent to JICA. The first phase of the KSFMBC was executed between 2005 and 2012 with the aid of JICA (Rs 745 crore). The second phase will run from 2013-14 - 2020-21.
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Meanwhile, the Minister said no wildlife has died due to foot and mouth disease in wildlife sanctuaries of the state.
Department officials have been instructed to take all precautionary steps to prevent the spread of disease in sanctuaries, he said.
More than 2000 cows died due to the disease in various districts, official sources said.