As part of the contract, Tata Communications will roll out a network which will power the airline's systems, including passenger check-in, flight operations and departure control applications, as well as corporate programmes in the Middle East, Africa and Asia Pacific.
"The network will form the backbone for the company as it embraces the latest mobile, cloud, big data analytics and wearable technologies to enhance and personalise passenger experience," the company said in a statement.
Air France-KLM, which carried 87.4 million passengers in 2014, is the first major European airline group to move away from the legacy networks widely used in the airline industry.
"We're introducing a range of innovative services, such as travel apps for smartwatches, to provide a seamless, personalised travel experience for our tech-savvy passengers," Jean-Christophe Lalanne, CIO of Air France-KLM Group said.