The European Space Agency (Esa) has ordered the first bespoke spacecraft in its new global monitoring programme.
Sentinel 1 is the first Earth observation satellite to be built for the Global Monitoring for Environment and Security (GMES) project.
Esa plans to launch five Sentinel spacecraft to track changes in the land, oceans, weather and climate.
A 229m euro (£155m) contract for the design and development of Sentinel 1 was signed at the Paris Air Show.
Jean-Jacques Dordain, Esa director-general, and Pascale Sourisse, chief executive of industrial partner Thales Alenia Space, were on hand to do the honours.
"This is the first concrete step in creating the space infrastructure for GMES," said Volker Liebig, Esa's director of Earth observation programmes.
GMES is designed to provide Europe's politicians with independent environmental data to support policy decisions.
The programme will have a particular emphasis on climate change.
"The last G8 summit showed that Europe has really taken a lead in the political discussions about global change," Mr Liebig told journalists in Paris.
"GMES will deliver the necessary instruments and information so that our politicians can make the right decisions on how we adapt and tackle this complex issue."
The Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report predicts a temperature rise by the end of the century of between 1.8C and 4C (3.2-7.2F).
The report, published earlier this year, also says sea levels are likely to rise by 18-59cm (7-23 inches) and Arctic summer sea ice is likely to disappear in second half of the century.
These climatic changes are likely to lead to a rise in the frequency of heatwaves and an increase in the intensity of tropical storms.
"Global climate change is not something for our grandchildren to deal with any more. It is taking place," said Mr Liebig.
Pascale Sourisse added: "GMES is essential for European citizens and the industrial community. It will help predictions in the short, medium and long-term."
Sentinel 1 is equipped with a synthetic aperture radar (SAR) system, used to generate detailed radar images. By using radar, the satellite can make images at any time of the day or night, regardless of the Sun's illumination.
Radar wavelengths are longer than those of visible or infrared light. So SAR can "see" through cloudy and dusty conditions that visible and infrared instruments cannot.
Sentinel 1 will image the Earth in swathes 250km (155 miles) in diameter and with a ground resolution of five metres.
It will be able to monitor environmental conditions on land and at sea. It will be able to provide detailed data on land surface motions when, for example, landslides occur.
The satellite's capability for rapid mapping will be vital after natural disasters, when emergency services need to identify quickly whether roads still exist and villages are still intact.
It will also watch over the marine environment, mapping oil spills and changes in sea ice.
Sentinel 1, said Mr Liebig, "gives us the only means to observe what is happening at the poles, which have a very important impact on sea levels and climate".
Another area where Sentinel 1's capabilities may be vital is illustrated by the 11m (36ft) waves which hit the Indian Ocean island of Reunion on 14 May this year, and by the 2004 tsunami disaster.
"Now it is possible to see big waves travelling over the oceans. The waves that hit Reunion were caused by a storm off South Africa and were travelling for 11,000km across the ocean before they hit," said Volker Liebig.
Sentinel 1 is expected to be launched in 2011.
GMES is a joint initiative of the European Commission and Esa and is one part of an international co-operative effort known as Global Earth Observation System of Systems (Geoss).
This is designed to bring together existing and new hardware and software, making it compatible to supply Earth observation data to countries around the world.
British companies were hoping the Sentinel contract would come to the UK - especially given Prime Minister Tony Blair's statements on climate change and vocal support for GMES.
However, the Department for Environment, Food and Rural Affairs (Defra) entered the Esa programme at such a low level of financial contribution, the loss of the prime contractor role to the French-Italian company Thales Alenia Space was inevitable, observers say.
Industrialists last week urged the UK government to raise its GMES investment when Esa called for the next round of subscriptions.
A report this year from the US National Research Council (NRC) said that funding cuts to Nasa programmes would weaken the space agency's capacity to monitor the planet's climate. Esa officials rejected suggestions that Europe was, by proxy, taking up principal responsibility for Earth observation.