AMV fought off competition from CHI & Partners and VCCP to win the contract, which is set to last three to four years.
The agency will work across the IPS's entire area of work, including ID cards, passports and the General Register Office.
James Hall, IPS chief executive, said: "IPS needs an agency to support the development of a creative strategy targeting a variety of audiences across all our work, including the National Identity Service.
"Abbott Mead Vickers BBDO has shown a high degree of creativity and some excellent long-term strategic thinking."
Ian Pearman, managing director of AMV BBDO, said: "We're over the moon to be working with the Identity and Passport Service.
"This contract provides AMV BDDO with the opportunity to work on one of the most exciting accounts in Government communications.
"We hope to use our expertise and experience to bring insightful and creative strategic direction to IPS' advertising across all its services."
IPS has just hired Alan Gilmour, the former Lloyds TSB marketer, as director of marketing and customer insight.