The new Rs 200 notes will be in circulation from Friday, the Reserve Bank of India (RBI) announced on Thursday.
The Rs 200 denomination banknote in the Mahatma Gandhi (New) series will bear the signature of RBI Governor Urjit R Patel and will be initially issued by select RBI offices and some banks.
It has the motif of the Sanchi Stupa on the reverse while its base colour is bright yellow.
The note has other designs and geometric patterns aligning with the overall colour scheme, both on the obverse and reverse.
The move is aimed at increasing the circulation of smaller denomination notes.
The RBI said the introduction of new denomination and design is done keeping in mind factors like ease of transactions, replacement of soiled banknotes, inflation and the need to check counterfeiting.
Noting that the optimal system of denominations of currency is one that minimises their number "and concurrently increase the probability of proffering exact change", the central bank said that "in the lower end of the denomination series, Rs 200 is the missing one."
"There is a logical need to introduce the missing denomination of Rs 200, which will make the present currency system more efficient."