
Narendra Modi, who has embarked on a hectic schedule of foreign visits since taking office a year ago, will travel to Dhaka on June 6 on a two-day trip.
The ministry said his visit reflected the importance India attached to its smaller neighbour and would "strengthen the ties of friendship and trust".
Read:World is optimistic about India: Modi
Earlier, Home Minister Rajnath Singh indicated that an agreement to share water from the Teesta river could soon be finalised.
"Both countries will give their approval to it very soon," the Press Trust of India news agency quoted him as saying.
Bangladesh shares 54 rivers with India including the Teesta, and has long sought an agreement on water.
The Teesta deal was meant to be a highlight of a 2011 trip by Prime Minister Manmohan Singh to Dhaka, but it fell through after opposition from the chief minister of India's West Bengal state.
The failure soured relations between India and Bangladesh, where Prime Minister Sheikh Hasina has staked much political capital in resolving an issue crucial for farmers in her country's drought-hit north.
If agreement can be reached it would be the second breakthrough this year after India's parliament this month passed a bill that paves the way for redrawing the border between the two countries.
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