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The deal, which involves both voice and data, will replace the existing time division multiplexing-based network with an IP-based system to link the force's 43 sites.
A client/server set-up will use the increased bandwidth and more flexible management capabilities to replace the existing mainframe and green-screen IT system.
The greater inherent visibility and manageability of the IP network will give a clearer idea of service levels, reduce downtime and enable bandwidth to be actively managed.
The contract will see BT monitor and manage the network and provide quality of service reports.
The Infrastructure Programme upgrade forms part of the Association of Chief Police Officers' Information Systems Strategy adopted in January.
Paul Ramsey, head of information systems for North Yorkshire Police, said, "Bandwidth is a big issue. At present we have only about 2 megabits per second on the backbone, which reduces to merely kilobits to some locations.
"Also the existing network cannot cope with change. We need shorter lead times to be able to provision bandwidth to locations that need it," he added.
The network will be operational by August with 700 new PCs being rolled out in the next phase.