The Isle of Man government has deployed a £4m voice over IP network connecting 180 locations and 4,500 public sector workers.
The network will provide the government's 3,500 civil servants with voice, data and video services at greatly reduced cost.
A further 1,000 education, health and social care employees will be linked to the government's network for the first time.
The Isle of Man government will use the network, managed by Manx Telecom and Dimension Data, to supply new e-government services later this year.
Allan Paterson, director of the information systems division at the Isle of Man government, said, "The core aim is to drive efficiencies within government and provide a much higher level of effectiveness to customers."
The first services to be deployed by the government in the autumn will be online tax and VAT applications. Further applications will be deployed covering services that are provided by both central and local government on the UK mainland.
The Isle of Man government has estimated that moving from a conventional network to an IP network will save it up to £1.4m a year.