"It will not be signed Monday but it is being finalized," an aide to the president said.
The deal is for military equipment and arms to be supplied to Lebanon's army.
Hollande told an official dinner at the Elysee presidential palace attended by Prince Salman bin Abdul Aziz, who is also the Saudi deputy prime minister and defense minister, that Lebanon was a "great but vulnerable country" which "needs security".
The deal comes as Beirut faces the mainly Saudi-funded threat of so-called Islamic State of Iraq and the Levant (ISIL) terrorists on its border with Syria. More than a million refugees have fled the war in Syria by escaping to Lebanon, according to figures from the United Nations.
Hollande claimed that France and Saudi Arabia have a "shared priority of peace and security in the Middle East".
Salman is due to hold talks with French Prime Minister Manuel Valls on Tuesday.
He is also due to meet Foreign Minister Laurent Fabius on Wednesday for talks over the situation in Iraq and Syria, where ISIL terrorists have seized swathes of territory and are terrorizing Shiites, Sunnis, Christians and other minorities.
Last week Hollande rejected any cooperation with Syrian President Bashar al-Assad, after the Syrian government said it was willing to work with the international community to tackle the ISIL terrorists.
And in comments carried on national TV at the weekend, Saudi Arabia's King Abdullah had unexpectedly warned the West would be the next target of the ISIL sweeping through Syria and Iraq, unless there is "rapid" action.
"If we ignore them, I am sure they will reach Europe in a month and America in another month," he said in remarks quoted on Saturday by the Asharq al-Awsat newspaper and Saudi-backed Al-Arabiya television station.
Saudi officials’ visit to France comes just over two weeks after another member of the Saudi royal family, Prince Abdul Aziz Bin Fahd, fell victim to a brazen heist in Paris when a gang of heavily armed bandits hijacked the lead vehicle of his 10-car convoy and stole at least 250,000 euros and documents.
NJF/NJF