The move comes as SNCF is expanding its budget service Ouigo to connect to more cities.
Lyon will become the fifth French city to get a direct Ouigo link to Paris when the service opens in June 2020, reported French newspaper Le Monde.
Currently, train passengers can get a cheap Ouigo service from Paris to Lyon airport – around 30 miles outside the city centre – or go from Lyon to Marne-la-Vallée, around 45km outside Paris, but cannot make the direct trip.
But from June 1 2020, a budget TGV will go direct from Lyon's central Part-Dieu station to Gare de Lyon in Paris with prices starting at €16 for adults and €8 for children.
SNCF says it will start with three routes a day and possibly look to expand.
When France's famous high speed TGV network was first launched 38 years ago, Paris to Lyon was the first route and it remains one of the busiest lines on the French network.
By expanding the low-cost option to Lyon, SNCF hopes to make the rail network more accessible to people on low incomes – and also head off competition from Spanish and Italian budget rail operators who have plans to take on the Lyon to Paris route.
The cities of Bordeaux, Rennes, Strasbourg and Marseille already have a direct Ouigo link to Paris.
SNCF launched Ouigo in 2013 in an attempt to lure customers away from cheap domestic flights.
The trains travel on many of the same routes as the more expensive TGV InOui and travel at the same speed but are more basic – with no dining car, wifi or first class options. When the service first began it frequently only took passengers to the outskirts of the big cities, but it is now gradually expanding its direct routes. It carried 18 million passengers in 2018.