The original contract, signed in January 2002, covers services such as IT security architecture design, standards development and technology security monitoring and testing.
John Young, head of IT risk and security at HBOS, said Ernst & Young has been playing a crucial role in forging the IT architecture and strategy of the bank, which was formed last year by the merger between Bank of Scotland and the Halifax.
"We are still in the middle of that [merger] now. There is an enormous amount of IT change and risk involved but by the end of the year we will have resolved this," said Young.
Last year HBOS terminated two separate outsourcing contracts with IBM and Xansa to bring control of its IT back in house. The £700m IBM contract had eight years left to run.
Young said, "With the size of our organisation, it is not feasible for us to have experts in all of our operating systems, but we can get that through Ernst & Young. There is also a cost benefit."