The Indian cricket board had cancelled the graded contracts -- ranging from 49,000 dollars to 122,000 dollars -- after the team's humiliating first-round exit from the World Cup in the Caribbean in March.
The Board of Control for Cricket in India (BCCI) instead suggested a flat annual retainer of one million rupees (about 24,400 dollars) besides the usual match fees and hefty win bonuses.
But the graded contracts, already pending since last October, were re-instated following negotiations last week between the BCCI and players' representatives, led by captain Rahul Dravid.
The contracts for 17 players, announced on Sunday, will date back to October, 2006 and remain valid until September 30 this year, when they will again come up for renewal.
Opener Virender Sehwag, spinner Harbhajan Singh and seamer Irfan Pathan, who were all axed for the England tour due to poor form, were demoted from the elite Grade A to Grade B.
Senior batsman Venkatsai Laxman was also taken off Grade A, which now includes left-handed batsman Yuvraj Singh and wicket-keeper Mahendra Singh Dhoni.
Batsman Mohammad Kaif and spinner Murali Kartik were not given contracts, while injury-prone seamer Munaf Patel was handed a Grade C contract for the first time.
The Grade A players will get an annual retainer of five million rupees, followed by Grade B with 3.5 million rupees and Grade C with two million rupees.
The match fees range from 6,100 dollars for Tests and 4,000 dollars for one-day internationals.
India are scheduled to play three Tests and seven one-day internationals on the England tour which commences in mid-July.
Before that, India will play three one-dayers against South Africa and one each against Ireland and Pakistan in Belfast and Glasgow from June 23 to July 3.
Grade A: Rahul Dravid, Sachin Tendulkar, Sourav Ganguly, Yuvraj Singh, Mahendra Singh Dhoni, Anil Kumble.
Grade B: Venkatsai Laxman, Virender Sehwag, Harbhajan Singh, Ajit Agarkar, Irfan Pathan.
Grade C: Wasim Jaffer, Gautam Gambhir, Suresh Raina, Zaheer Khan, Shanthakumaran Sreesanth, Munaf Patel.