The mobile phone giant, which has never retained a digital agency before, also plans to double its online marketing budget in 2006.
Dare will now be charged with developing a digital strategy for the business, as well as handling online marketing and ongoing development of the vodafone.co.uk website.
Vodafone has previously used a handful of agencies on a project basis.
Dominic Chambers, the head of brand and marketing communications at Vodafone UK, described this approach as "totally inadequate".
Chambers said: "We want Dare to be at the top table with JWT and Harrison Troughton Wunderman and to be involved at the start of briefs. We also want to look at digital taking a lead role in some of our campaigns rather than being a tag-on at the end."