More efficient 900 Megahertz will also be auctioned in Delhi, Mumbai and Kolkata at double the new reserve price.
Both the auctions are to be concluded by the end to this financial year.
The decision was taken by the empowered group of Ministers on Telecom headed by Finance Minister P Chidambaram.
There were no takers for spectrum in four circles, Delhi, Mumbai, Rajasthan and Karnataka mainly on account of the high reserve price.
The auction of GSM spectrum attracted bids worth only Rs 94.07 billion , as against the minimum expected amount of Rs 280 billion.
''The EGoM met today and we have decided to auction the 1800 MHz band in four circles - Delhi, Mumbai, Karnataka and Rajasthan - and 900 MHz band in Mumbai, Kolkata and Delhi,'' Telecom Minister Kapil Sibal told reporters in New Delhi on Friday.
He added that a decision on the pricing has been taken and ''we will now be moving the Cabinet for the approval on the pricing and we have also decided that we will complete the auction process within this financial year.''
Sibal said no decision has been taken on the auction of airwaves in 800 Mhz band.