IBM has won a five-year, $484 million renewal with the Department of Human Services for IT support, extending an 11-year and $1 billion relationship.
The contract means IBM will continue to support key Human Services programs like myGov, Centrelink and Medicare, among other hardware and software support services.
IBM has held the deal since 2005, and the most recent contract was due to expire in June this year.
The new arrangement brings the total value of the partnership past the $1 billion mark to just under $1.5 billion.
It also means IBM will play a supporting role in the department's billion-dollar welfare systems replacement, which it went took to market last September.
The "once-in-a-generation" overhaul, one of the highest profile IT projects in Australia, will see the department migrate off its more than 30 year-old income support integrated system (ISIS).
Human Services Minister Alan Tudge said in a statement the new contract with IBM provided the department more flexibility to meet changing needs.
"To continue to progress in the digital age the government needs integrated and cognitive technology that enables quick transformation, streamlined services and constant adaption to customer need," he said.
"This will also ensure the government is prepared to transition to new infrastructure with more dynamic capability to support future programs."