The Office of Government Commerce (OGC) hopes the system will allow public sector agencies to buy products more quickly, easily and cost-effectively.
The Linux-based system is being operated by OGCbuying.solutions only for customers in the department of work and pensions. The technology is used for the purchase of printed forms, stationery and associated items but in the long term is likely to encompass a much wider range of goods and services.
Hugh Barrett, chief executive of OGCbuying.solutions, said: "Our decision to use open-source software was based on its proven reliability, portability and lower licensing costs. Overall it represented best value for money in this application."
A facility for the online payment of invoices will be incorporated in the coming months.
Martin Sykes, executive director of OGC's e-commerce group, said: "This work will give us access to valuable experience in the operation of open-source software, while contributing to (the department's) needs for improved efficiency and effectiveness."
IBM supplied the server hardware for the system. Cable & Wireless provided the network infrastructure and will support the hardware element of the new system.
Silicon.com's Graham Hayday reported from London.