This emerged after the fourth India-Brazil-South Africa (IBSA) summit here.
The two satellites will be used for studying climate to help agriculture sector in the three countries.
Speaking to media after the summit, Prime Minister Manmohan Singh said that IBSA besides the embodiment of south-south cooperation had entered the phase of consolidation and implementation of initiatives.
He said IBSA has immense prospects for the people of the three countries and the right direction was being provided to it by strengthening cooperation in science and technology, energy, ocean's research, which were the hallmark of the forum.
"OBS has developed into a vibrant organisation which will play important role in world affairs," Singh said at the joint media interaction with Brazilian President Lula da Silva and South African President Jacob Zuma.
Singh said the three developing economies and democracies shared similar views with regard to reform of global institutions of governance like the UN.
Zuma said that IBSA has a natural dialogue forum and he has great confidence in its future. He said the decision to develop the satellite jointly was symbolic of the fact that the forum has entered a new phase.
He pointed out that the member countries had common positions on the Doha round of WTO talks. He pressed for early conclusions of the Doha round of trade talks saying it can't be put indefinitely.
Zuma said the IBSA was rapidly emerging as an important forum for engagement. "But we are yet to fully explore the full potential of this forum," he said.
The South African president, whose country will host the next IBSA summit, said there was an opportunity for expanding cooperation in science and technology and reinforcing shared developmental objectives.
Noting that all the three IBSA countries were influential in their own regions, Zuma said, "We are in a position to make contributions to a global debate. This became clear at the Copenhagen Summit on climate change when IBSA and China played a key role in reaching an agreement."
He said the four countries were able to reflect the interest of developing nations at the climate meet.
He said the IBSA countries were key for reform of global bodies like UN to make them more democratic and more responsive to the poor.
Zuma said the three countries needed more coordination on climate change to ensure legally binding agreement on the issue in the next summit in Mexico next year.
"By working together we can build a better world and bring better future," Zuma said.