The DMS is designed to control energy distribution, identify and self-heal outages as well as gather and integrate grid and external data to improve efficiency of the network.
The system will also automate system management and respond to changes in the network using algorithms.
Schneider Electric smart grid director Barrie Cressey said: "A smarter grid is vital to put the UK on track to meet the European objective of becoming a low-carbon economy by 2050, as well as allowing energy distributors (DNOs) to meet the goals outlined by Ofgem in the new eight year Price Control Period (RIIO-ED1)."
The project will allow the network to manage the peaks and troughs of supply and demand as more intermittent energy sources are introduced to the grid.
Electricity North West engineering head Steve Cox said: "Over the next eight years, the existing energy infrastructure, designed for a one way flow of energy, will have to deal with a level of complexity never before seen.
"The modularity of the system that Schneider Electric is able to provide means that we can expand and improve our system according to our needs."
