The contract was awarded to the joint venture between the two engineering firms and Mott MacDonald Group.
The firms will upgrade of overhead power lines and underground cables in west England and Wales.
The five-year extension is worth £650m and will run until 2017.
Amec and Babcock Networks are the major partners in the joint venture, owning a 47.5 per cent share each.
Mike Saunders, president of Amec’s power and process Europe business said: “This extension to 2017 is testimony to the excellent day-to-day performance of the alliance and the focus we have placed on ensuring we safely meet the requirements of a very important and long-standing customer.”
Babcock’s chief executive Peter Rogers said: “We look forward to building on this partnership with National Grid as it delivers the significant investment programme required to support the UK's growing energy needs.”
Amec announced yesterday that it had been awarded two asset support contracts by SABIC UK Petrochemicals worth a total of £70m. One of the contracts was a £40m extension to maintenance Amec is already carrying out.
Globally, Amec employs around 27,000 people in 325 offices across 40 countries, with a presence in every continent. Other major clients the company has on its books include oil giant BP, Chevron, ExxonMobil, Sellafield and Shell.