French President François Hollande announced the decision today at a special Defence Council attended by Prime Minister Manuel Valls and six ministers and military top brass.
The decision has been hailed as an early Christmas present for the Defence Ministry with 18,500 jobs saved and an extra 3.8 billion euro bonus.
The original plan, drafted last year, was to slash 34,000 jobs in the defense sector. But now roughly half of those posts will be saved.
Hollande announced that the government would be willing to make a serious effort to scrape together funds for domestic and international security.
His decision comes in light of the Charlie Hebdo attacks in January this year, which triggered a costly military operation.
"France faces threats, serious threats, within our territory as well as abroad," Hollande said. "After the attacks in early January here in France, which had tragic consequences, I decided to place our anti-terror program at the highest level. I also decided to mobilise around 10,000 troops as part of this programme."
According to former admiral Alain Coldefy, the posts that have been saved are mostly military personnel here in France.
"These jobs are mainly in the army just because on the national territory, the army is now engaged," he told RFI. "It was only 10,000 soldiers for one month and now we have to deliver 7,000 soldiers all throughout the year. That means more soldiers, mainly in the army."
The airforce and the navy are already working more or less within the budget, according to Coldefy. "But for the army, it was impossible to have 10,000 soldiers in Mali and Africa, all around the world and also on the national territory."
The Socialist government had previously made defence cuts one of its flagship reforms.
But tackling jihadism at home and abroad is an expensive affair and the French army says it is increasingly stretched.
Defense Minister Jean-Yves Le Drian called for an extra eight billion euros to sustain operations at home and abroad.
And Hollande said roughly half of that, 3.8 billion euros, could be freed up between now and 2019.
Camille Grand, director of the thinktank Fondation de la Recherche Stratégique, said the money will have to come from other ministries.
"Altogether we are talking about 0.1 per cent of the total public spending and about 0.3 per cent of the state budget," he said. "So this is not such a huge decision. It's of course very complicated at a time when the ministry of finance is asking all ministries to cut spending. And it simply means that together with education and justice, the defence budget has been sanctuarised, which will be at the expense of other budgets which are under pressure already."
France’s defence budget is the second largest in Europe, after the United Kingdom.
But the UK military has been far less present abroad and, according to Coldefy, it’s time other European countries step up their game.
"You know, the UK and France are the only two countries in Europe with such big budgets. Even though cut on both sides of the channel, we remain the two leading nations in Europe which is very uncomfortable in facing Russia and some challenges in Iraq. We cannot be alone for long," he said.
The French have repeatedly come under fire for failing to meet deadlines set by Brussels and for failing to curb what other EU members see as lavish public spending.
The announcement has also been criticised by conservative UMP lawmakers, who said funds were still nowhere near enough to sustain France’s military operations.
The new budget draft will be presented at a cabinet meeting at the end of May.