The agreement is preliminary and conditional on having a venue approved by F1, said IOA president Suresh Kalmadi on Thursday.
"We have bagged a F1 championship for India," Kalmadi said.
New Delhi does not currently have a motor racing track, but Kalmadi said the IOA, together with the government, would build in or near the Indian capital. He ruled out a street race.
While F1 is not an Olympic event, Kalmadi said the organization was involved as part of its attempt to bring as many major sporting events as possible to New Delhi ahead of the city's staging of the 2010 Commonwealth Games.
"Formula One may not be an Olympic sport, but we recognize and promote nearly 50 non-Olympic sports within the country," Kalmadi said after a IOA executive council meeting.
He said the executive council had ratified the preliminary memorandum of understanding with Formula One Management (FOM).
"We have an agreement in place, a formal contract will be signed once things move forward," Kalmadi said.
The letter from FOM to Kalmadi stipulates the IOA must sign the contract and submit financial guarantees for the event by Sept. 30, 2007.
"They (FOM) have been trying for 15 years to stage a Formula One event in India, but had not succeeded," Kalmadi said.
"The IOA will be a promoter of the event and it will be our responsibility to raise the necessary finances though government and private funds," he added. "It's a tough task, but we're hoping to meet the challenge."
Kalmadi said efforts to bring top international events to the Indian capital had already attracted the field hockey World Cup and the world badminton championships - both ahead of the 2010 Commonwealth Games, of which Kalmadi is the chief organizer.