The state government has been using an advanced IT infrastructure to provide citizen services since 2013, an official spokesman said here.
It now plans to extend the network across the state using cloud computing infrastructure, he added.
"Today's MoU with Microsoft will help the government access the best of Microsoft's technology and expertise for improvement of digital services to citizens and drive digital inclusion in the state," he said.
Deputy Chief Minister Sukhbir Singh Badal said, "We believe technology can empower our citizens and help them thrive in today's digital world. We welcome Microsoft's partnership and value their expertise in creating a citizen centric IT infrastructure in the state."
Microsoft will also train manpower in advanced IT technology in the state, he said.
Anil Bhansali, Managing Director, Microsoft India (R&D) Pvt Ltd, said, "We are happy to bring the power of Microsoft cloud technologies, machine learning and data analytics to the state of Punjab. We are happy to support the government of Punjab in its effort to enhance citizen services and drive digital inclusion.