The agency won the Department of Health account after a two-way final shoot-out against Profero.
Grand Union will devise digital communications for an integrated campaign launching in mid-November and will also design and develop a new consumer website.
The campaign is part of an initiative to reduce the number of sexually transmitted infections among 16- to 24-year-olds by promoting safer sex through the normalisation of condom use.
Grand Union will also develop a stakeholder website to support the initiative. It will be aimed at public health practitioners, healthcare communicators, administrators and promoters.
Rob Forshaw, a partner at the agency, said: "Removing the taboo that exists around condom use among young people is something we feel is well suited to interactive media."
The Government last year increased its advertising budget to £50 million in response to figures showing a rise in the number of STDs.