We present a study of the eclipsing symbiotic binary FN Sgr with a period of 568.3 days determined photometrically and confirmed spectroscopically. The hot component underwent a 2.5 mag eruption covered by most of our spectroscopic observations. In particular, we have determined for the first time spectroscopic orbits based on the radial velocity curves for both components. A set of blue absorption lines resembling an A-F type star is present in all our spectra and they seem to be associated with the hot component. Based on the light curve, we derive the red giant's radius (140~ R☉) and the orbital inclination (i = 80°). We find that FN Sgr is similar to other S-type symbiotic binaries, composed by an M 5-type giant (M_g=1.5 M☉) and a hot white dwarf (Mh = 0.7~ M☉, R_h= 0.2~ R☉) with a binary separation of ~1.6 AU. The red giant is just filling its Roche lobe and a geometrically and optically thick accretion disk is likely to be present around the low-mass accretor. The evolution of Th and Lh along the active phase argues in favour of accretion disk instabilities similar to those of Z And. We have also studied spectral changes and photometric variations as a function of both the hot component activity and the orbital motion.