Bilateral cricket between the nuclear-armed neighbours were snapped after the 2008 Mumbai attacks in which 166 people were killed. India blame Pakistan-based militants for the incident.
India and Pakistan have fought three wars in the past 65 years, and the already fragile relations were further strained since the carnage when gunmen attacked two upmarket hotels, a busy railway terminal and a fashionable cafe in Mumbai.
The last series between the two sides was Pakistan's tour of India in 2007 although Pakistan travelled to India to play the 50-over World Cup semi-final in Mohali last year.
"It was decided to resume cricketing ties with Pakistan by inviting the Pakistan cricket team for a short series in December 2012-January 2013," the BCCI said in a statement following a working committee meeting in New Delhi.
Pakistan will be invited to play three one-day internationals and two Twenty20 internationals, BCCI vice-president Rajeev Shukla told reporters.
Chennai, Kolkata and New Delhi will be the venues for the ODIs while Bangalore and Ahmedabad will host the two T20 matches, Shukla, who is a member of India's parliament, said.
"Talks have been going on for the last one year. The public want the two countries to continue playing cricket," Shukla said, adding that India's foreign ministry had no objections on the tour.
The news was welcomed in Pakistan.
"It's a great ice-breaker and I am really happy that after months of negotiations and discussions, Pakistan and India are now set to resume bilateral ties," Pakistan Cricket Board chairman Zaka Ashraf said in Lahore.
"I am sure millions of cricket fans in both countries will be happy with his decision."
Pakistan cricket officials had expressed hopes of renewing bilateral ties with India after the BCCI in May invited them to send a team for this year's Champions League T20 tournament.
A cricket match between India and Pakistan is one of the most celebrated and intense sports rivalries and attracts millions of viewers around the world.
Shukla ruled out any revenue-sharing agreement with the Pakistan Cricket Board regarding the series.
"There is no provision for revenue sharing. The host country gets the full share of the revenue," Shukla said.
India will host England for three Tests and two T20 matches before Christmas. The visitors will return to India to play five ODI matches in January.
Australia are also scheduled to play four Tests in India in February-March next year.