Swansea City Council is set to award Capgemini a £119m IT services contract to improve its electronic services over the next 10 years.
Capgemini beat ITNET to the deal after the council shortlisted the two companies in May 2004. The contract is due to be signed in April.
The programme will be funded by transferring the money the council already spends on IT, internet services and customer-facing services such as reception points, which totals £99m over 10 years, and new investment of £2m a year over the next decade, the council said.
Capgemini will also introduce improved customer access through a new call centre, contact centres, extended opening hours and improved internet services - known as service@swansea. The partnership is expected to create new jobs in Swansea with Capgemini planning to expand its existing office in the city which already employs 130 people.
The deal was announced at the end of a difficult year for Swansea's IT department. In October, IT staff returned to work after an eight-week strike. They alleged the council did not consult properly over the outsourcing deal or consider the option of retaining resources in house, but returned to work following talks with arbitration service Acas.
Ovum senior analyst Georgina O'Toole said the deal was Capgemini's first major outsourcing contract in local government, but the company was already providing high-level consulting and transformational delivery to several leading councils such as Westminster and Croydon.