The system will see users pay a fixed fee to stream unlimited music, as well as a set number of DRM-free downloads.
The difference between this and other similar services appears to revolve around the download side of the offer. TechRadar has contacted Sky to find out how many this might be and at what cost, but so far has received no comment.
The lack of DRM means the songs can be used on any MP3 player, including the iPod and mobile phones, a criticism levelled at service such as Napster-to-go, which heavily protects the songs it supplies.
Mike Darcey, Chief Operating Officer, BSkyB, comments: "It's clear that there's huge demand for online music and companies like Sky and Universal Music are well placed to work together to meet consumers' needs.
"We aim to offer an easy and affordable service for all UK music fans, while ensuring that artists are properly rewarded for their creativity."
Sky will set up a new company to launch the venture, and Universal Music will become a shareholder in the venture as part of its initial commitment to the service.