The xchangewales programme will provide an all-Wales system that will allow every Welsh public sector organisation to find suppliers and order and pay for goods online.
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The assembly said the benefits will be lower prices, increased use of corporate contracts and paperless ordering with reduced administration.
Andrew Davies, Assembly minister for finance and public service delivery, said, "By modernising the procurement and payment process of the Welsh public sector, from schools to local authorities, Wales will be the first place in the UK to deliver an electronic sourcing, ordering and payments system on a country-wide 'shared services' basis."
Seventeen organisations across the NHS, local government and higher education have already put themselves forward as "Pathfinders" for the programme.
The project will go live in spring 2008, said the assembly.