The top-level meeting was attended by Hollande, Prime Minister Manuel Valls and six ministers aling with the military top brass, headed by Chief of Staff Pierre de Villiers.
Following January's murders at the Charlie Hebdo paper and a kosher supermarket, the government pledged to step up security in France.
But, in the light of calls for budgetary rigour, its 2014-2019 defence plan had allowed a 31.4-billion-euro budget and proposed the shedding of 34,000 jobs in the military.
The military has called for an extra eight billion euros but Hollande on Tuesday said an extra 3.8 billion euros would be made available from now until 2019.
The council decided to save 18,500 of the jobs that were set for the axe.