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The expanded contract, among TCS's largest, comes at a time when there are expectations that India's $100 billion IT services sector may be turning a corner, helped by acceleration in IT spending by existing customers and addition of clients.
Nielsen also extended the contract by three years to 2020, and said it would buy at least $100 million in services annually from TCS, according to a regulatory filing.
The number of clients contributing $100 million or more to annual revenue rose to 16 from 14, TCS said in January.
Under the 10-year contract signed in 2007, TCS provided IT and business services to Nielsen.
TCS already has a multi-year outsourcing contract worth $2.5 billion with Citigroup Inc and a $2.2 billion contract with UK-based Friends Life.
TCS, a unit of the salt-to-steel Tata Group conglomerate, boasts of major clients including General Electric, British Airways and Sony Corp.
The company competes with rival Indian software providers Infosys Ltd and Wipro Ltd as well as multinational firms such as IBM and Accenture Plc for outsourcing deals.
TCS shares closed at Rs 1,414.70 on Monday on India's National Stock Exchange.
Nielsen, which has a market value of $11.9 billion, closed at $32.67 on the New York Stock Exchange.
