A statement from Ericsson said O2 had asked it to upgrade existing 2G/3G/4G sites as part of a network modernisation.
Under the expanded deal, Ericsson hardware, software and service upgrades will be deployed in the west of the country, resulting in greater coverage, voice and data capacity.
O2 chief technology officer Brendan O'Reilly said: “We are pleased to be moving forward with Ericsson as one of our primary vendors for our 5G rollout.
O2's move will put pressure on the other three telcos — Vodafone, EE (BT) and Three — to announced their choice of vendor for buying their final equipment.
All four companies have used Huawei gear in non-core parts of the network. The companies relied on interim advice from the government of Theresa May, leaked in April 2019, that this would be the government's final stance. That decision was formally announced by the Johnson government in January.
Spanish group Telefonica owns O2 and it has used Huawei’s infrastructure in some of its other networks. O2 has no wide use of Huawei in the UK, but has a network-sharing agreement with Vodafone.
But on 23 May, reports said that Prime Minister Boris Johnson had changed his mind and Huawei gear would be completely stripped out, with the process to finish by the end of 2023.
Industry sources have told iTWire that if the UK went ahead with this policy, it would cost about £7 billion (A$12.9 billion).
Additionally, the government would have no chance of keeping to its pledge of providing gigabit broadband services to the entire country by 2025, these sources said.
Probably taking these two factors into consideration, British ministers were reported on 28 May as changing policy to now exclude Huawei gear after 2023, and resigned to leaving the installed equipment in place.
Ericsson said it would aid O2 in rolling out commercial 5G services in other cities, towns and locations in England, Scotland, Wales and Northern Ireland.
Ericsson president of Europe and Latin America Arun Bansal said: “5G will be crucial for the UK’s economic recovery and underpin its digital future. We are committed to ensuring that the UK achieves its gigabit connectivity targets so that enterprises and society at large benefit from high quality connectivity. We are delighted to be continuing our long-term partnership with O2 with this 5G network evolution.
"We are proud to expand our world-class 5G coverage, leading the modernisation of UK networks as a reliable partner for years to come. Together with all of our customers, we are focused on delivering more capacity and connectivity, especially as networks are more critical than ever.”