The French nuclear energy group Areva has been awarded a licence to build and operate the Imouraren mine in Niger.
Areva says it expects it to become Africa's biggest uranium mine and the second biggest in the world.
Mining will begin on the site in 2012, with 1,400 staff producing 5,000 tonnes a year.
The investment will go ahead despite the fall in uranium prices, which have almost halved while negotiations have been taking place.
"Prices now are not what they were when negotiations started, but nevertheless the conditions we defined together allow us to open this deposit," said Areva chief executive Anne Lauvergeon at a signing ceremony in Niger's capital Niamey.
Areva will have a 66.65% stake in the mine, with Niger holding the rest.
The French company will provide two-thirds of the initial investment of 1.12bn euros ($1.51bn; £1.02bn).