The agreement marks a key step in the Post Office's drive to expand its range of services and products to generate new revenues to support the branch network by helping replace lost income from a decline in its traditional business.
Alan Cook, the Post Office's Managing Director, warmly welcomed the deal, saying: "We're delighted to have BT as a partner in a deal that gives a tremendous boost to the Post Office's determination to be one of the leading players in the telecoms market.
"The agreement provides the platform to enhance the Post Office's existing HomePhone service while offering customers some of the best deals in the market for both voice and internet broadband services."
Paul Reynolds, Chief Executive at BT Wholesale, said: "This is a landmark agreement between two of the UK's leading and best established businesses. It will help to quickly establish the Post Office as a key player in an exciting, dynamic and ultra competitive market for broadband-based services.”
Under the four-year deal, BT Wholesale will provide an integrated range of telephony and broadband services.