The 10-day drill code named "hand in hand" would be formally inaugurated tomorrow at a designated area close to Chengdu city.
The annual exercises, which began in 2007, are being resumed after a gap of five years.
The first exercises were held in China's Kunming city followed by the second round at Belgaum in Karanataka in 2008.
The next round was called off by India following the denial of visa to a top General heading troops in Jammu and Kashmir on the grounds that the region formed part of disputed territory.
The two sides resumed contacts after China rescinded its decision and began issuing regular visas to residents of Jammu and Kashmir, a move that facilitated a broad engagement between the two giant neighbours.
However, border tensions flared up when Chinese troops pitched tents deep inside the Indian side of Line of Actual Control (LAC) in Ladakh region in April this year.
It was resolved subsequently ahead of Chinese Premier Li Keqiang's visit to New Delhi followed by return visit of Prime Minister Manmohan Singh last month.
During Singh's visit, the two countries signed the Border Defence Cooperation Agreement (BDCA) which both sides believe would effectively address a host of issues causing tension at the disputed border.
The military exercises were firmed up during defence minister A K Antony's visit here in July this year.
Significantly, the exercises focussing on anti-terrorism drills were taking place as China stepped up its campaign against terrorism after last week's suicide attack at the Forbidden City overlooking Tiananmen square here.
Following this China said it would up step anti-terrorism cooperation members of the six member Shanghai Cooperation Organisation consisting of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan.
India and Pakistan are observers in the grouping.