IT services major Infosys on Friday said it has inked an agreement with Australian federal government's Services Australia to transform the entitlement calculation engine for the nation's welfare system.

The project will enable Services Australia to more quickly implement policy changes for the benefit of Australians without disrupting services and deliver operational cost savings, a statement said.

The Welfare Payment Infrastructure Transformation (WPIT) programme will replace a significant portion of Centrelink's 30-year-old platform, modernising the way Services Australia calculates entitlements for Australians needing government support, it added.

No financial details of the partnership were disclosed.

Infosys said it was selected by Services Australia following a comprehensive Competitive Dialogue phase which demonstrated a rigorous risk-mitigation strategy to deliver the innovative new solution.

The phase I agreement is for Infosys to create a proof of design and is expected to be completed by mid-2020.

Subject to further approval, Phase II of the project will encompass the build, implementation, and support for the new ECE, the statement said.

The Infosys Australia technical team will service the project, led by its expanding Canberra office.

"With the technology and technical skills of our 5,500 strong team here in Australia, as well as the unique global expertise from similar projects which we can draw upon, Infosys is well placed to add value to Services Australia and enhance the outcomes of the project for all Australians," Infosys Senior Vice President and Region Head Australia and New Zealand Andrew Groth said.