The work on 66 LAV IIIs will be done by General Dynamics Land Systems at plants in Edmonton and London, Ont.
The announcement Friday expands a $1.06 billion contract awarded in October of last year to overhaul 550 of the vehicles.
The LAV III, which can carry troops and weapon systems, is the backbone of the Canadian Army's armoured forces.
The upgrade will make the vehicles faster, improve the weapon system and to better withstand threats such as roadside bombs.
Public Works Minister Rona Ambrose says the new contract will keep people on the job longer at the two General Dynamics plants.