"The deal for one battery was signed last year. The work on it is underway and will be completed in 2020," the source said.
Serbian President Aleksandar Vucic mentioned buying one system in late October.
The Pantsir-S1 air defence missile-gun system, designated as the SA-22 Greyhound by the North Atlantic Treaty Organization, is designed to protect vital military and industrial objects from various types of aerial threats.
The Pantsir-S1 is currently being exported to several countries, including Serbia, Vietnam, Syria, Jordan, Iran, Iraq and the United Arab Emirates.