The £30m, three-year deal will cover all of Network Rail's several hundred sites, including offices, control centres, depots, signal boxes and level crossings.
The new IP infrastructure will offer more reliable communications and contribute to Network Rail's overall efficiency programme, which is intended to reduce costs.
Catherine Doran, Network Rail director of information management, said, "We chose BT as we were impressed by its strong customer service orientation and competitive pricing. We are looking forward to a mutually beneficial partnership in the coming years."
The new network will ultimately be integrated into Network Rail's FTN project, which will renew and replace 16,000kms of copper cabling and 11,000kms of fibre optic cabling, in readiness to launch a state-of-the-art digital driver-to-signaler radio system.