The Icelandic government has recently launched a one year project that will build a foundation for using free and open source software in its institutions. According to reports from project leader Tryggvi Björgvinsson, the three biggest public institutions in Iceland: all of the ministries, the city of Reykjavik and the National Hospital, are all lined up for the migration.

But before fully embracing open source, the team is estimating the maturity of these free and open source alternatives to proprietary software. “This will foster collaboration between public institutions, IT service providers and the free and open source community in Iceland,” Björgvinsson says.

According to the team, “public institutions in Iceland have slowly been migrating to free software over the last four years. This school year, 2011-2012, two new secondary schools moved their systems entirely to free and open source software, bringing the count to five out of 32 schools.”

From Björgvinsson:

We are also making sure that in our public schools, the national curricula does not restrict the use of free and open source software. The country-wide migration project will build upon their experience and hopefully pave the way for other institutions to follow.

From the Prime Minister’s Office:

The government of Iceland has agreed on a policy regarding free and open-source software. The policy states, among other things, that when purchasing new software, free and open-source software and proprietary software are to be considered on an equal footing, with the object of always selecting the most favourable purchase.

Following the Icelandic financial crisis, this move to embrace open source software could cut costs and pave the way for other governments to embrace it. Conversely, if this fails it could halt other attempts to bring open source into public institutions. This move has the potential to leave a very big impact on the open source community.

For more, check out the official policy for Iceland’s open source project.