The CBA and EDS want to establish a new "service oriented relationship" that will see both parties work towards delivering service improvements and specific expense reduction initiatives.

"The signing of this extension is a cornerstone in improving IT service delivery across the bank," Harte said. "We have taken back the control through better governance and have set more meaningful business and customer service standards."

Harte said the departure from the old model is "meaningful" and it will fundamentally change the nature of the relationship, moving away from pure contract management to a joint "service oriented" approach.

"We have learnt a great deal over the last eight years and this new commitment from both parties will change the spirit and nature of our arrangements," he said.A spokesperson for the bank said the new agreement is only for the mid-range and mainframe environments, while the desktop support and other outsourced areas remain part of the old agreement, the bank will be looking at that part of business "as we go forward".

The bank also announced it will construct a new, greenfield data center in Sydney's west.