For the new mission, scientists plan to send a drone-like multi-rotor helicopter to fly over the surface, dropping down to take samples at dozens of different locations hundreds of kilometres apart.
It will only be the second time that a craft has landed on Titan. In 2004, Nasa's Huygens probe touched down, but it was not equipped to look for signs of life.
The launch is currently scheduled for 2025, with the probe touching down in 2034.
Elizabeth Turtle, principal investigator for the Dragonfly mission from Johns Hopkins University Applied Physics Laboratory (APL), which is overseeing the project, said it was clear that Titan has "the ingredients for life". "There isn't a life-limiting aspect of the environment, in that sense which is nice," she said. "Dragonfly is designed to go back, build on what we've learned and answer the fundamental unknowns that remain about Titan."
The mission will receive funding until at least 2019, Nasa has confirmed as part of the New Frontiers project which has already sent the New Horizons probe to Pluto and the Juno spacecraft to Jupiter.
A second mission, known as Caesar - Comet Astrobiology Exploration Sample Return - also secured funding. The project from Cornell University aims to return to the Rosetta comet 67P/Churyumov-Gerasimenko to collect samples, and return them to Earth.
The two mission concepts were chosen from 12 proposals submitted in May to address the most pressing Solar System exploration goals, as identified by the planetary science community.
A decision about whether Dragonfly or Caesar will be selected for the final mission will be made in the Spring of 2019.
