The companies will replace all 250,000 lights in 302 Metro stations, as well as 66 suburban stations on the city's RER network, as part of a four-year €11 million deal with RATP, the organisation that runs Paris's public transport.
RATP is hoping to slash its energy consumption by more than half by introducing LEDs, while improving the quality of light.
Local manufacturer Step teamed up with Philips to win the lion's share of the lighting work in RATP's tender, issued in June last year, with the rest going to Grenoble-based semiconductor specialist Soitec.
Benjamin Azoulay, general manager of Philips Lighting France, said the deal would make the Paris system 'the world's first transport network whose stations will be fully fitted with LED lighting'.
Around one million square metres of space will be relit, including station entrances, ticket offices, corridors and platforms. RATP described the project as 'a titanic challenge'.
The transport operator, which carries 12 million passengers around Paris every day, aims to reduce its energy consumption and greenhouse gas emissions by 15 per cent between 2004 and 2020, and at the moment, electricity used in its stations represents about 12 per cent of its total energy consumption.
Around 100 stations will be relit each year, beginning next month with Franklin D Roosevelt Metro station in central Paris.
RATP said it was proud to be helping a French SME, in the shape of Soitec, to help strengthen its foothold in the lighting market. Step will be taking on new staff to complete the work, and is working in partnership with a local not-for-profit organisation that helps find work for people with disabilities.