The New York office of O&M beat a shortlist comprising three-year incumbent FCB and TBWA\Chiat\Day. Fallon Worldwide was dropped from the pitch last month.
The account was put up for review three months ago in anticipation of a restructuring at AT&T.
The win is seen as a coup for O&M, which last year lost its footing in the telecoms sector after it was dropped by GTE when it merged with Bell Atlantic to become Verizon Communications.
AT&T Wireless said it awarded the account to O&M because of the agency's history in the hi-tech sector with clients such as IBM and Motorola.
FCB will continue to handle AT&T's consumer and business advertising, while O&M sister WPP Group company, Young & Rubicam, retains the company's corporate branding. Media Edge in New York continues to handle media planning and buying for AT&T Wireless.
The news of the win coincides with the launch of a TV campaign created by FCB to announce the division's new status.