Ericsson said it would provide BT a dual-mode core that is able to support BT's existing 4G services as well as its upcoming 5G services.
BT CTIO Howard Watson said: "We are looking forward to working together as we build out our converged 4G and 5G core network across the UK. An agile, cloud-native core infrastructure is at the heart of our ambition to enable the next generation of exciting 5G services for our customers and give the UK the world-class digital infrastructure it needs to win in the future global economy."
Marielle Lindgren, Head of Ericsson UK and Ireland, said: "Ericsson and BT have a long history of working together and we are delighted to continue that relationship with this new dual-mode 5G Core deal."
BT said it evaluated different 5G core vendors before picking Ericsson as its 5G partner. However, Chinese telecom equipment maker Huawei, which previously supplied core parts for BT's 4G network, was not considered for the new contract as the company has already been banned by the British government from supplying sensitive 'core' parts of 5G and gigabit-capable networks.
Earlier in December 2018, BT announced that it would begin removing Huawei equipment from the core of its mobile network. The company also said that it would not consider the Chinese firm for its 5G core contracts.
BT currently uses equipment from Huawei and Finnish firm Nokia in its radio access network, although it said to be more reliant on the Chinese firm. The fibre network of BT also uses equipment from both suppliers, although it is currently in the process of deciding on a third vendor.
Earlier this year, BT said that introducing alternatives to Huawei would cost it nearly £500 million over a period of five years.