The initial £64.1m contract with the Department for Health & Social Care for the supply of 352m masks runs until the end of March next year.
The masks will be used in the NHS and social care.
Over the summer the Wath upon Dearne business pivoted its business model and set up a new surgical mask manufacturing operation in a space originally intended for print expansion.
The South Yorkshire firm became the first UK manufacturer of type IIR surgical masks in the process.
Bluetree initially invested nearly £2m in clean room facilities and two DCG twin-channel mask making lines from Diecut Global, with space for another should it be required.
It already had the capacity to produce 20m masks per week to meet growing demand.
Separately, it is selling masks to end users on a monthly subscription in quantities from 50 to 500 via its Mask Box offering, targeting a wide range of businesses from vets and dentists to nail bars.
Mask Box subs are also being offered to trade print clients via its Route 1 Print trade wing.
Bluetree is emphasising the known provenance and quality standards of its masks compared to the well-documented problems with some imported masks that have not met the required standards.
The group is also donating a year's supply of 10,000 medical-grade masks each to two local hospices: Bluebell Wood Children's Hospice and Martin House Hospice.
The £41.5m turnover group employed around 350 staff but could create as many as 400 new jobs at the booming mask business.
Director Adam Carnell commented: “This contract gives us the opportunity to help produce millions more much-needed surgical masks for NHS and frontline workers using our specialist machinery and team of skilled machine operators.
“This is a period of significant growth for Bluetree Group and we’re looking to recruit 400 people in total to help meet increased production demand."
It is currently recruiting for a range of roles including machine operators, team leaders, logistics specialists and quality control operatives.
The government has awarded three substantial contracts to so-called ‘Northern Powerhouse’ businesses as part of a move to secure critical PPE supplies. As well as Bluetree Group, Scarborough-based Duraweld has been awarded a contract for the production of 5.2m face visors, while Private White in Manchester is to supply 1.1m gowns and 15.3m IIR masks.