Under the agreement EDS will manage Nextel's corporate data centre, database administration, IT help desk, desktop services and other technical services.
Nextel and EDS have chosen Sun Microsystems as the platform provider for the contract. All three companies expect to work together to identify the potential for developing wireless data systems based on Sun's Java technology.
Nextel said it expects to reduce its costs by $140m (£98m) over the five-year period.
As part of the outsourcing agreement, 290 Nextel employees will move to EDS, where they will continue to work to support Nextel's IT infrastructure.