The energy supplier will now receive the majority of its 16 million smart meter devices from the firm.
As a result of the deal, British Gas will recruit an extra 500 smart energy experts to fit the meters and Landis+Gyr expects to double its UK workforce - with a total of 600 new jobs at the smart meter manufacturer expected.
The push for smart meters comes as part of the government's drive to have smart meters rolled out and fitted in homes across the UK as standard by 2020.
Smart meters show real time-usage of energy in the home, with readings sent to energy suppliers daily. This gives both the bill payer and the energy supplier a much reliable figure for energy usage rather than estimates.
British Gas Managing Director, Chris Weston, said: "Smart meters herald a new era for energy customers, bringing a transformation in the way they can manage energy use in their homes and businesses.
"Our £600m investment in Landis+Gyr's smart metering solutions means we can provide smart meters cost-effectively to our customers, and bring them the benefits of this innovative technology as soon as possible.
"British Gas is leading the industry in the deployment of smart meters as part of our commitment to reshaping the energy industry for the digital era, making it easier for customers to understand their energy use and keep bills under control."
British Gas is also part of the government's Green Deal initiative. As part of the scheme, it offers its energy customers loans on items such as boilers and wall insulation, the consumer then pays the loan back at a rate equivalent to the money they expect to save once the energy improvement measures are in place.
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