The new issue of bonds will finance the state budgetary deficit, which is half lower than last year's.
The bonds will also cover the ongoing servicing of loans until the year's end, the Ivo Sanader cabinet said at a session in the northern coastal town of Porec.
Finance Minister Ivan Suker said this was the last issuance of bonds this year.
On 30 September this year the government deficit was twice as low as on 30 September 2005.
The bonds will be issued on 14 November, with a fixed annual yield of 4.5 and will mature on 11 July 2013.
The government said that the growth of the country's overall foreign debt was slowing down.
The state foreign debt was cut by more than four billion kuna last year. The first eight moths of this year saw a reduction by an additional 3.3 billion kuna.
Prime Minister Ivo Sanader expressed satisfaction with the results of the government's decision in 2004 that the state should stop incurring debts on foreign capital markets and issue bonds on the domestic market. Consequently, the domestic market has become livelier.
Sanader also commended his government for efforts to curb unemployment.
According to the methodology of the International Labour Organisation, Croatia's unemployment rate was 11.8 percent in the first half of this year as against 12.7 percent in the first half of 2005.
The government also sent to parliament amendments to the Court Register Act, adjusting the law to the EU acquis communautaire.
(1EUR = 7.4 kuna)