The government aims to secure new deals with a number of major software providers, which will allow all government departments to license software at the same price, helping further drive down public sector IT costs.
Oracle is the first software firm that has signed up to the new deal, and the Cabinet Office said the partnership would deliver in excess of £75m in savings by 2015.
The government currently spends £200m a year with Oracle.
In the past, different parts of government have bought software from Oracle on different terms and at different discounts, said John Collington, chief government procurement officer, at a roundtable discussion at the Cabinet Office on Wednesday.
Today's deal will mean that central government and all emergency services will act as a single client, with all departments buying software using the same discount rate.
"This deal was made over a number of months, which represents the fact that there was lots of spending with Oracle that was complex and not direct," said Collington.
"It struck me as an anomaly that some government departments would negotiate deals directly with Oracle, and other would agree them with system integrators."
Collington said that system integrators would often charge the government administration fees whenever it purchased a licensing deal with Oracle.
"We will now consolidate all the purchase and order requests and then manage them on a central basis with Oracle. We are looking to better manage licences like we never have before," he added.
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