The deal, which is thought to be the largest of its kind in the water industry, will see Thames Water reduce the time it takes staff to get to the scene of bursts or leaks by tracking vehicles down to two metres.
The group is also hoping that the Automated Vehicle Location (AVL) system will increase productivity of drivers.
Carl Leadbeater, operations manager at Thames Water, said: 'Until now we have been able to monitor separate teams rather than our whole workforce so this new technology is a big step forwards.
'As well as reducing fuel consumption, it will in many cases help us reach locations quicker.'
Systems supplier DigiCore will install the new tracking system and the group's director, Tom O'Connor, said: 'The true power of they system is its ability to produce comprehensive information about vehicle movements, which can be employed to drive down costs and improve operational effectiveness.'