American company Maximus is taking over the contract to assess the fitness of benefits claimants to work, the BBC understands.
French firm Atos, the previous service provider, quit the contract in March.
It has been estimated the new deal will be worth approximately £500 million over three-and-a-half years.
Maximus is already used by the Department for Work and Pensions to carry out welfare-to-work schemes in the south-east of England.
People applying for Employment and Support Allowance due to illness or disability must attend a 'Work Capability Assessment' before their claim is processed.
The BBC's Michael Buchanan said Atos, whose contract was supposed to end in August 2015, quit the contract after having become a "lightning rod for disgruntled disabled people" and receiving accusations that it was "insensitive and made a lot of mistakes".
At the time, disabilities minister Mike Penning said ATOS would "not receive a single penny of compensation from the taxpayer".
Labour's Kate Green, shadow minister for disabled people, said the government's "chaotic handling of Atos's contract to run Work Capability Assessments has left more than 600,000 people stuck in a huge backlog while many thousands more are being let down by a failing service which is costing taxpayers millions of pounds".
Maximus is based in the United States, with a branch in the UK, where it offers services in healthcare and employment assessments.