Uganda Airlines has been defunct since 2001
The country's works and transport minister said government made initial deposits of about UGX4.4bn for the 6 passenger planes.
The decision was preceded by "careful feasibility studies" and a "business plan was approved by Cabinet".
The government is looking at acquiring four Bombardier CRJ900 passenger jets and two wide-body A330-200 aircraft, Minister Azuba Ntege said.
The four Bombardier planes will have 80-100 passenger chauffeur capacity.
Uganda Airlines operations are expected to start in November, 17 years after liquidation.
The minister acknowledged that the revival of Uganda Airlines will not instantly generate profits.
Plans are underway to involve Uganda Airlines in other sectors, including catering and ground handling.
The airlines break even point is expected to be realised in four to five years.