Washington State Investment Board, Olympia, hired State Street Bank as global custodian and securities lending provider, said spokeswoman Liz Mendizabal.
An RFP was issued by the board, which oversees $78.6 billion, earlier this year.
The four-year contract, which begins July 1, includes the option of two, three-year extensions.
The other finalist was incumbent J.P. Morgan.
State Street received the highest score in the investment board's competitive bidding process, Ms. Mendizabal said.
Washington State reached an $11.7 million settlement with State Street in October 2010 following a dispute over the pricing of foreign-exchange transactions while it was master custodian from 1997 to 2007. Ms. Mendizabal did not address whether the dispute or settlement were factors in the latest hiring of State Street.