The decision was made against the backdrop of a pertinent border scuffle with Chinese troops and a remark by the Indian external affairs minister about Pakistan-administered Kashmir on Tuesday.
The project is expected to be completed within two years.
"The work will cover various aspects of borders, including tracing its making; making and unmaking and shifting of borders; role of security forces; role of borderland people encompassing their ethnicity, culture and socio-economic aspects of their lives", the Indian Defence Ministry said following a meeting with eminent personalities in New Delhi.
Defence Minister Rajnath Singh announced the decision after meeting personalities from the Indian Council of Historical Research and officials of the Nehru Memorial Museum and Library, Directorate General of Archives, Ministry of Home Affairs, Ministry of External Affairs, and Ministry of Defence.
The minister said that the project would provide a better understanding of the borders to the public in general and officials in particular.
"It is a first-of-its-kind project to make people aware of national borders and people living in the border regions", the ministry added.
Of late, India has been asserting its stance on the disputed borders with China and Pakistan, especially after the revocation of quasi-autonomy previously granted to the state of Jammu and Kashmir.
New Delhi has split the state into two parts, with Ladakh having been declared a separate administrative block.
China strongly rejected the decision by New Delhi and asked India to scrap the move. India rejected the Chinese stance, saying: "What we (India) have done has not changed the external boundaries of India".
India shares around 4,000 km of boundary with China, ranging from Kashmir to Arunachal Pradesh.
China describes the Indian state of Arunachal Pradesh as its “South Tibet”. Since the abrogation of Jammu and Kashmir's special status on 5 August, the border dispute in Ladakh also flared up, while the Uttarakhand border dispute with China remains.
At the core of the recent border face-off is the 823 km of un-demarcated boundary between India and China, which had not been disturbed for centuries due to cultural, religious, and other historical Indian relations with Tibet.
On Tuesday, Indian External Affairs Minister S. Jaishankar also emphasised that Pakistan-administered Kashmir is part of India and that "we expect one day that we will have the physical jurisdiction over it".