Transport for London (TfL) has given notice to terminate its contract with TranSys, the £100m-a-year consortium responsible for maintaining and developing the Oyster card system.

The announcement follows a year of negotiations between TfL and the pool of suppliers, which includes EDS and Cubic.

Cost-cutting and “dramatic changes” in the London transport system over the past 10 years were cited as the main driver behind the decision.

"Transport for London is looking at more cost-effective ways to manage and develop the Oyster card system that we expect will save millions over the next few years,” said TfL's director of fares and ticketing, Shashi Verma.

“The savings will be reinvested to deliver further improvements in London's transport system," he said.

The TranSys consortium will continue to operate and deliver until the 10-year break clause between the parties in 2010.

A plan setting out the criteria for the new suppliers and a plan to ensure stability of the systems supporting the smartcard are expected to be part of TfL's IT agenda in the next two years.

"As with any end of a contract, service continuity is fundamental," said a TfL spokesman.

"We have a two year notice period and will put in place the necessary arrangements to ensure the continuity of the system is maintained."