Commonwealth Bank of Australia Ltd. has agreed in principle to a $3.7 billion outsourcing deal with Electronic Data Systems Corp.

The deal, which should be finalized in the next few months, would be one of the largest bank outsourcing deals ever.

EDS would manage virtually all of Commonwealth Bank's technology operations for 10 years, and Commonwealth would receive a 35% stake in EDS' Australian unit.

Gregory M. Gould, an analyst at Goldman Sachs & Co., said the contract was good news for EDS, which he said has disappointed investors in three of the past four quarters.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.