The Department will transition from its ageing Microsoft Windows NT platform to Windows XP, which will cover approximately 62,000 PCs and 85,000 user accounts.
When asked why XP was selected, a Defence spokesperson told ZDNet Australia the move to XP was based on the need for a secure and scalable environment to support operational and administrative requirements.
ZDNet Australia understands Defence started work on the project during the last 30 days.
The start of the rollout follows Defence's technical development of the SOE, aimed at producing a Windows XP desktop, Windows 2000 server and Active Directory.
To prolong the life of the new SOE, that project team will also provide ongoing development of the system, once rolled out.
The project, known as SOE 125, is being managed internally, mainly by the Department's Defence Information Environment Standard Operating Environment section. However, a number of external service providers will be used as well, the spokesperson said.
The Department has refused to reveal the total budget as it prepares tenders related to the project.
The majority of Defence sites in Australia are expected to run on the new SOE by July 2006.