Corbett's Monday announcement came nearly a year after Attorney General Kathleen Kane's office rejected the Camelot Global Services contract as illegal.
The Pennsylvania Lottery is among the nation's largest, with $3.7 billion in sales last year.
The Camelot bid faced numerous hurdles. The process was criticized as too secretive and rigged to favor Camelot, which was the only bidder.
Corbett insisted the deal would help the lottery make more money.
But he was unable to persuade Republican lawmakers to approve it, and Democrats pounded it as siphoning money from programs that benefit the elderly.
