The broadcasters said it was a “bold, new step” that they hope will tap into the growing demand for new and old British television content.
“The agreement to launch BritBox is a milestone moment,” said ITV chief executive Carolyn McCall.
BBC director general Toby Hall added: “Together, we have been responsible for delivering the majority of ‘must see’ moments on British TV over the last decade. That ‘must see’ content will now be on BritBox.”
BritBox is a subscription streaming service similar to Netflix and Amazon Prime, except the content library is made up of shows from the BBC and ITV archives.
The service, which was launched in the US a couple of years ago, will also commission new shows, dramas and comedies.
UK users will pay £5.99, which ITV and the Beeb said was a ‘competitive price’ and slightly less than rival streaming services charge.
For the time being, viewers will only be able to watch BBC and ITV content, but talks with other partners are ongoing and more announcements on this are expected in the coming months.
ITV shares were up 1.7% to 110.9p on Friday morning.