Sky and BT have agreed to make their channels available on each other's platforms.
This means BT can market and sell Sky's NOW TV service and its entertainment, sport and cinema passes directly to its customers, giving them access to popular content including Sky Sports, Sky Atlantic and Sky Cinema.
Sky will also make NOW TV available on BT TV's set-top box, while BT will supply its sports channels to Sky.
As a result, subscribers with each provider will have access to every single Premier League, Uefa Champions League and Europa League match.
The new services should be available to customers from early 2019.
Gavin Patterson, Chief Executive of BT, commented: "This is an important day for BT and for our customers, who will be able to enjoy a whole range of Sky’s sport and entertainment programming on their BT TV boxes.
"This is the next logical step for our TV and content strategy. Having built up an outstanding portfolio of exclusive sports rights and a loyal base of customers, we feel that now is the right time to broaden the ways in which we distribute BT Sport."
Mr Patterson said the agreement with Sky fits with its strategic goal of being Britain's best provider of converged network services.
He went on to state that adding NOW TV boosts its "growing roster of outstanding content", which already includes the major catch-up services, Netflix and pay channels such as AMC.
Jeremy Darroch, Group Chief Executive of Sky, added that the agreement is "great news" for its customers.
"This is all part of our stated strategy to enhance our customer offering, to broaden our appeal and to open up new revenue streams for our business," he said.