George Osborne said the savings would cut 5% off Whitehall's annual IT bill.
He called for a more "level playing field" for all software companies, and urged "cultural change" in government.
Open source software allows users to read, alter and improve its code - in contrast to proprietary software where a company controls the source code.
In a speech on Thursday, Mr Osborne said that despite a government report in 2004 saying there would be "significant savings" in hardware and software if open source software was used, many government departments had not implemented it.
British conservatives vote for open-source
Posted on Friday, March 09 2007 @ 09:31:09 CET by Thomas De Maesschalck
BBC reports the British government could save more than £600 million a year by switching to open-source software.