The contract includes the OSI's ECPINS-W -- electronic chart precise integrated system -- and its warship automatic identification system.
The award to OSI was made under the Littoral Combat Ship program, under which BNS is building six Gowind-class corvettes for the Malaysian navy, a brief statement from Vancouver-based OSI said.
OSI Maritime Systems develops integrated bridge systems for warships, integrated diving navigation systems for submarines and navigation systems for small craft.
The company has 16 naval customers around the world with more than 500 warships and submarines operating its integrated navigation and tactical systems.
Boustead Naval Shipyard covers around 46 hectares within the main Malaysian naval base by the town of Lumut, Perak state.
The shipbuilding business was originally the Royal Malaysia Navy Dockyard when it was started in 1984.
The company was privatized in 1995 and taken over in 2005 by Boustead Holdings, a diversified Malaysian business.
The shipyard is part of Boustead Heavy Industries Corp. a listed company on the Kuala Lumpur Stock Exchange.
After a year of negotiation, BNS and the Malaysian government finalized the deal for six Gowinds with the French designer and manufacturer DCNS, making it the first export customer for the vessels, Defense Industry Daily reported in April.
The Gowind, developed in 2006, is a family of steel mono-hull corvettes and offshore patrol vessels designed for flexible weapons deployment. The original design is for vessels between 1,000-2,500 tons.
The Gowind can deploy unmanned aerial, surface and underwater vehicles as well as carry a 10-ton helicopter.
Anuar Murad, director of the defense and security division at BHS parent Boustead Heavy Industry Corp., said the ships will be frigates of around 3,000 tons and all will be built in Malaysia.
The combat system will be assembled in Cyberjaya, a town in the district of Sepang, about 30 miles from Kuala Lumpur.
DCNS is the design authority which will work with Malaysian engineers in France to adapt the vessels to Malaysian navy standards.
DCNS also will advise on project management and combat system integration, DID reported.
The arrangement is intended to help develop Malaysia's indigenous shipbuilding capability. But it means the first Gowind won't enter service until 2019, two years later than if it were built in France, reported the defense intelligence website StrategyPage.com.
The cost to Malaysia is around $500 million for each Gowind, StrategyPage.com reported.
DCNS has found it difficult selling the design to navies, including the French navy.
Three years ago DCNS began building a 1,100-ton Gowind, called L'Adroit, with its own money, and persuaded the French navy to crew the ship for up to three years.
The L'Adroit visited the Vietnamese port of Hai Phong this month.