The contract to build the plant in Dabaa on the Mediterranean coast was signed during a live ceremony shown on state television and attended by the Russian leader and Egyptian President Abdel Fattah al-Sisi.
"By realising this project, Egypt will obtain not just the nuclear plant but also access to the most modern and safe technologies," Putin said after the signing.
The contract was signed by the head of Russian state nuclear company Rosatom, Alexei Likhachev, and Egypt's electricity and renewable energy minister, Mohamed Shaker.
A statement by Rosatom said it would build four 1,200MW reactors "as well as supplying nuclear fuel throughout the plant's entire operational lifetime".
"This will help ensure competitive electricity pricing in Egypt over a period of 60 years," it said.
Rosatom also said it will train the plant's personnel and help Egypt run and maintain the plant for its first 10 years of operation.
Russia's state news agency TASS reported the cost of the plant at around $30bn.
The first unit at the Dabaa plant will be commissioned by 2026, Rosatom said.
"Relations between the two countries have a long history and are strong and continuous," Sisi said after the signing ceremony.
He said future projects between Russia and Egypt were also being studied.
The two countries signed two agreements in November 2015 for Russia to finance and build the Dabaa plant.
Sisi announced the project in February that year during a visit by Putin, when a memorandum of understanding was signed.
Initial work on the project took place in the early 1980s during the regime of president Hosni Mubarak, who was ousted in January 2011, but it later halted over disputes with local residents after the 1986 Chernobyl disaster.
In Monday's talks, "we discussed another promising project, the creation in Egypt of a Russian industrial zone", Putin said.
"It will be the largest centre producing and exporting Russian goods to markets in the Middle East and Africa... We expect the volume of total investment in the project to reach $7bn."
As Egypt eagerly awaits commercial Russian flights to Egypt to restart, Putin said that procedures for a resumption were still under way.
Moscow suspended flights to Egypt in 2015 after the Islamic State group said it had bombed a Russian airliner carrying holidaymakers from a Red Sea resort popular with Russian tourists, killing all 224 people on board.
The plane crash and subsequent suspension badly hit Egypt's tourism sector, which was already reeling from the political and security turmoil that followed the uprising that toppled Mubarak.
"Russian security services have reported that in general we are ready to open direct flights between Moscow and Cairo. We would need to sign the relevant inter-governmental protocol," Putin said.
"We will try to sign it in the nearest future."
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