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IBM will manage all of Boots' IT infrastructure, including its data centre, in-store systems, data networks and telecoms.
IBM will also deploy and manage next-generation "chip and pin" compliant point-of-sale systems in Boots' 1,600 stores, together with in-store kiosks for the retailer's Advantage Card holders.
IBM will also provide database management and application maintenance to support the loyalty card programme, which has more than 14 million members.
Boots is the first client in the UK retail industry to sign up to IBM's Collaborative Innovation Programme, which aims to form client relationships that go beyond the provision of IT services.
Under the programme, the two companies will establish an innovation centre in Nottingham that will develop new uses for emerging technologies at Boots. Focus areas are expected to include wireless and mobile systems, IBM said.
David Lister, chief information officer at Boots, said, "Boots' success hinges on our ability to continue bringing innovation to our customers, stores, products and services. IBM will help us use technology to enhance the service and offering we provide to our customers."
More than 400 Boots employees will join IBM as part of the agreement.