A 500-strong battalion will be deployed to Estonia and 150 troops will go to Poland to "reassure" these countries, Defence Secretary Michael Fallon said.
It is part of a Nato commitment made after Russia's annexation of Crimea from Ukraine in 2014 to have four new battalions on its eastern flank.
Mr Fallon said it aims to "deter Russia from any further aggression".
Eastern Nato countries "feel enormous pressure from Russia doing large exercises on the border, flying over their airspace and so on," said the defence secretary.
"This [the deployment] is something Nato's been planning for a while, that countries like Estonia, Lithuania and Latvia have made clear that they want."
Nato looks east (and south)
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Where are British troops deployed overseas?
Four multi-national battalions will be deployed to Estonia, Latvia, Lithuania and Poland - led by the UK, the US, Germany and Canada - and these are due to be in place in early 2017.
A Ministry of Defence spokeswoman said UK troops have previously been deployed in the Baltic states for military training exercises, but this is the first time they will be based there permanently.
UK armed forces are already deployed in more than 80 countries across the world in a range of roles, including 450 soldiers in Afghanistan and more than 275 military training personnel in Iraq.
Prime Minister David Cameron, who is at a Nato summit in Warsaw, said: "This summit is a chance for us to reiterate our strong support for Ukraine and our other eastern allies to deter Russian aggression.
"Actions speak louder than words and the UK is proud to be taking the lead role, deploying troops across Eastern Europe.
"It is yet another example of the UK leading in Nato."
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