The deal is valued at more than £40m and will require Balfour Beatty to provide a minimum of 2,800 maintenance shifts per year across the UK rail network.
The contract also includes an option for an additional one-year extension.
Stoneblowers are used in track maintenance works to pneumatically inject small stones under the sleepers, which helps to eliminate gaps and stabilise the track.
The Stoneblower fleet currently comprises 14 operational machines, including 11 plain line machines that are allocated to specific geographical areas, as well as three multi-purpose machines that operate across the UK.
Network Rail ordered seven new multi-purpose machines last year, which are set to be delivered during the term of the latest contract.
The first of the new units is expected to commence service in 2020.
Balfour Beatty will provide skilled personnel to operate these new machines upon delivery as part of the agreement.
The recruitment of trained crew members is scheduled to start early next year.
Balfour Beatty’s rail business managing director Mark Bullock said: “The award of this contract to maintain and operate Network Rail’s fleet of Stoneblowers demonstrates the technical rail expertise Balfour Beatty has gained over many generations of working on the railway.
“The contract is an exciting one for us as it not only includes the operation and maintenance of the current fleet, but also the introduction of seven new multi-purpose machines.”
The new contract is expected to provide employment for around 140 people, including four apprentices and graduates.