The contract will commence on April 1, with Business Post subsidiary UK Mail responsible for collecting and sorting TV Licensing's pre-sorted mail and passing it on to Royal Mail for last mile delivery.
The BBC, the recipient of the TV Licence, began trialling UK Mail's services in October. During this period, substantial cost savings were identified along with an improved flow of calls to its call centre.
TV Licensing sends out approximately 61m items of mail a year.
Last month, Royal Mail lost out on revenue after BT awarded a £90m three-year contract to deliver bills and statements to TNT Post.