A Czech court had blocked the multi-billion-dollar deal in May after French energy group EDF filed a complaint, questioning the transparency of the tender which it lost.
But a higher court threw out the ruling on Wednesday over procedural flaws, enabling the government of Czech Prime Minister Petr Fiala to ink the deal.
"A while ago we signed an agreement on the supply of two units for the Dukovany nuclear plant," Fiala told reporters.
"We did our best to make sure the deal can be signed the instant the legal obstacles are removed," he said.
He hailed the signature as a "fundamental step on the way to higher energy security and self-sufficiency".
KHNP is due to build the two units at the southern Czech nuclear plant of Dukovany run by the state-run CEZ group.
The Czech Republic, an EU member of 10.9 million people, relies on nuclear power -- produced by Dukovany and the Temelin plant also in the south -- for 40 percent of its electricity consumption.
With the two new units and small modular reactors due to be built by 2050, the share of nuclear energy is expected to rise to 50 percent as the country shifts away from burning fossil fuels.
Fiala said earlier KHNP won the tender as its bid was "better in all criteria assessed" than EDF's offer.
On Wednesday, he said KHNP has vowed to hand 60 percent of the contract to Czech suppliers.
KHNP has offered to build the two new units for around 200 billion Czech koruna ($9 billion) each.
Prague expected to finalise the deal with KHNP by March this year, but complaints by EDF delayed the process.
CEZ expects construction to begin in 2029 and the first new reactor launched in trial operation in 2036.
frj/lth
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