Telstra has won a $1.1 billion contract with the Department of Defence that will lead to 350 new jobs being created at Australia's largest telco.

Under the six-and-a-half-year contract, Telstra will help integrate the department's fixed telecommunications with its satellite and tactical networks.

"This partnership will deliver Defence with robust and secure information communications technology, while creating greater efficiencies and lower costs," Defence chief information officer Peter Lawrence said.

"The project includes a major transformation program of work and the ongoing sustainment of Defence's telecommunications environment."

Telstra chief executive David Thodey said it was the largest customer undertaking in the company's history and would support military operations in Australia and overseas.

"We will create 350 new positions to help serve the contract, including recruiting some of the nation's leading IT, network and security experts," he said.

"The use of technology such as unified communications, advanced video conferencing as well as tablet and smartphone usage, will provide a vital link connecting troops, commanders, bases and allies around the world."

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