The 10-year deal with IBM Canada will see the information technology giant manage the government's computer system that contains provincial budget, procurement and payroll information.
The move will affect 75 workers who will be offered work with IBM while another 21 will have an opportunity to work within the Finance Department, the government said Thursday.
The Nova Scotia government has also entered into an eight-year agreement that will see the company get a $12.4 million payroll rebate if it creates 500 new jobs.
The company is to take over management of the system on March 1.
Joan Jessome, the president of the Nova Scotia Government and General Employees Union, said the outsourcing goes against the basic principles of New Democrats.
"It's been proven over and over again - right across the country to the other and then some - that when you privatize the public service in the long run it costs a lot more," she said Thursday.
Chris Wright, one of the affected employees, called the news "terrible."
"All the government is guaranteeing us is two years. After that, they're leaving us alone, we're on our own with IBM," he said Thursday after the workers were briefed.
"I think the NDP government sold us out."
In September, more than 100 public sector workers who manage human resources, payroll and purchasing throughout the provincial government were told their jobs may be privatized.
The NDP government said at the time it was considering an offer from IBM to take over the SAP system. The NSGEU said the deal would be worth $100 million.