Sanghvi, India's second-richest man, will pay 18 billion rupees through Dilip Sanghvi Family and Associates (DSA) for 1 billion new shares in Suzlon, issued by way of a preferential allotment.
Sanghvi's investment firm and Suzlon will also form a wind farm joint venture for the development of 450 megawatt (MW) of wind farms, the statement said.
Loss-making Suzlon has been under pressure over the last few years due to a slowdown in global turbine sales and a growing debt pile. It was forced to restructure $1.8 billion of debt after defaulting on a $200 million convertible bond redemption in 2012.
The deal will provide Suzlon with much needed liquidity and the company said it would also use the cash to tap opportunities in India and growth markets like the United States, China, Brazil, South Africa, Turkey and Mexico.
Suzlon shares have risen 15 percent in the past week on media reports of Sanghvi's interest in investing in the company in a personal capacity. The company last week denied having received a proposal from Sanghvi.
Suzlon sold its German unit Senvion SE to buyout firm Centerbridge Partners last month for 1 billion euros in an all-cash deal, part of the company's plans to halve rupee debt by March 31.