The move comes as President Donald Trump works to reduce federal spending through billionaire ally Elon Musk's DOGE government reform team, which is working to cancel contracts and shrink the agency.
Google said the 71% discount, part of an agreement with the U.S. General Services Administration (GSA), could save federal agencies up to $2 billion if adopted government-wide.
The U.S. General Services Administration (GSA), which manages federal property and services, is one of the first agencies targeted for layoffs by the U.S. Department of Government Effectiveness (DOGE).
"The Workspace agreement marks a step forward in the General Services Administration's efforts to work with Google and other companies to deliver cost savings to the federal government," the General Services Administration said Thursday.
Pricing will be based on "whole-of-government volumes," rather than the lower discounts previously available through separate agreements between agencies.
The discount, which is valid until September 30, may help Google further strengthen its position in government spending contracts, which has previously been dominated by Microsoft.
Microsoft's share of the U.S. government software market is estimated to reach about 85% by 2021, according to research firm Omdia.
Google has been trying to beef up its product capabilities by adding a range of artificial intelligence capabilities to its Workspace suite, powered by its large language model Gemini, as it competes with Microsoft for a larger share of consumer, enterprise and government budgets.
Workspace is already used by some government agencies. Google said the Air Force Research Laboratory, which supports the U.S. Air Force and U.S. Space Force, has been using its products since 2021.