IBM has won the business as part of a competitive tender, released by Defence back in April 2007.
The tender was split into a series of hardware procurement panels - including servers, network equipment and IT services.
Murray Bruce, general manager of defence and national security sales at IBM Australia, said it was very difficult to tell how much revenue would result from the exclusive relationship.
At present, Defence runs some 8,000 x86 servers - the majority of which were sourced from HP.
Traditionally, Bruce said, clients replace servers every four years. Depending on whether Defence extends the deal to three or four years, and depending further on the department's procurement needs, the deal could see IBM sell anywhere from a few thousand x86 servers to 8,000.
"We would be confident, given the state of Defence's existing infrastructure and the mandate outlined in the latest Defence white paper, that this will be a significant deal," Bruce said.
The contract includes the provision of server implementation services and some consulting services.
While it was not explicitly written into the tender, Defence CIO Greg Farr has publicly stated that data centre consolidation is a significant requirement for Defence - and Bruce hopes IBM will be contracted under the server sourcing agreement to assist in this regard.
"Potentially, there is some consulting to do around virtualisation and rationalisation of data centres," he said.
Bruce said IBM won the tender as Defence was seeking "value for money, and also a relationship with a supplier who could work with them and provide a level of expertise around best practice ways of using the technology."
"The nice thing about this agreement is that it involves an IBM project management team inside Defence to work with them hand in glove," he said.
"That signals to me an improvement in the maturity of sourcing relationships, and is a lot more enjoyable than a typical vendor or supplier style relationship.
"It affords us the ability to be more responsive and for Defence to tap into IBM's intellectual property and lessons learnt."