The overhaul, coming on top of the NHS IT upgrade and the Inland Revenue's Aspire systems, will bring government spending on major IT projects to more than £12bn in the next decade.
The Ministry of Defence aims to update its basic IT infrastructure and improve command and battlefield management systems, said the Defence Communication Services Agency, which will run procurement for the project.
The DCSA will shortly announce a two-year assessment, costing up to £10m for the Defence Information Infrastructure (Future) programme, which by 2008 will support 320,000 user accounts and more than 140,000 access devices.
This will cover "computing platforms and infrastructure to all fixed sites (UK and abroad), and certain deployed elements such as joint forces headquarters, airbases, and maritime platforms", the DCSA said. "It will interface to other government departments, allies, Nato, and other collaborating forces."
Plans for the MoD contract emerged as the Inland Revenue closed the bidding on Project Aspire, the 10-year, £4bn private finance initiative project to modernise and run its computer system.
The three consortia bidding for the project are: the incumbent EDS and Accenture; an alliance of BT, CSC and SchlumbergerSema; and a rival consortium made up of Cap Gemini Ernst & Young and Fujitsu.
These suppliers are also being lined up to spearhead the regional consortia that will implement and manage the £2.3bn health service IT projects, and the DCSA has made plain that it also expects them to bid for the MoD contract.
The scale of this public sector IT investment will be a severe test for the government procurement and project management processes, said Liberal Democrat IT spokesman Richard Allen.
"We have finally got a government committed to delivering serious investment in IT. It would be a crying shame if this was jeopardised by lack of capacity and skills," he said.
"There are already questions about the capacity of the IT industry to deliver for the health sector on its own. When you add contracts of the size of the MoD's to the existing projects, there must be real risks that you cannot deliver."
The MoD has a poor record of delivering complex technology projects. A report from the National Audit Office last December slammed the MoD for underestimating the risks involved in major projects and for time slippage in procurement programmes.