The Department of Work and Pensions (DWP) has awarded a £237m contract extension to BT.
The three-year deal will see BT provide voice, data network and contact centre IT systems.
It is an extension of an existing deal between DWP and BT Global Services, which saw the latter helping to transform DWP's voice and data networks by installing an internet protocol and telephony system. BT says the system handles two million calls a day.
Under the extended contract, BT will provide converged IP local and wide area networks, IP telephony and a range of conferencing services, including video-conferencing.
The company will also continue to build and maintain DWP's contact centre. It says it has already rolled out nearly 22,000 seats for the virtual contact centre, and in 2010 will increase this to 30,000.
The work done by BT aims to help DWP meet its requirements for the government's public sector network scheme, which aims to create the effect of a single network infrastructure across government.