ITNet, the business processes and e-services provider, will support 3,500 desktops and assist Southwark's modernising government programme.
Southwark's IT director, Zbish Przekop, said the council was impressed with ITNet's track record of ICT delivery, despite its recent high profile dispute with Hackney Council.
"Southwark has selected ITNet as its ICT partner based on its track record of ICT delivery and its capability to improve ICT services to enable the borough to meet the challenges of e-government," said Przekop.
ITNet is still facing a £30m compensation claim from Hackney council following its sacking from a benefits and revenue contract. Hackney claimed to have incurred huge losses because its council tax collection and housing benefits services were poorly run.
But a spokesman for Southwark said: "If we were worried that ITNet could not do the job we would not have hired them."
Commenting on the deal, John Mackie, senior consultant at outsourcing consultancy Morgan Chambers, said: "Southwark must have considered the Hackney problems, not to mention the £30m claim, so the services they can offer must be very exciting to make up for this. ITNet does have the credentials to attract councils despite its recent history."
In addition to the Southwark contract, ITNet has also announced a seven-year, £3.5m customer relationship management deal with Haringey Council; a three-year contract with Accantia Health and Beauty to implement an SAP implementation and a two-and-a-half-year SAP contract with Cadbury Schweppes, worth a total of £4.4m.
The company has also had its IT infrastructure management contract with British Airways Pensions and Alenia Marconi renewed and extended. The contracts have a combined value of £7.2m.