Satellite broadcaster BSkyB has bought Virgin Media TV, which includes the Bravo and Living channels, in a £160m deal.
As part of the deal, Virgin Media will be able to offer some Sky HD channels for the first time. These include Sky Sports HD1 and Sky Movies HD.
Virgin's four million TV customers will also start getting access to Sky content through the On Demand service.
Sky and Virgin have previously clashed over access to each other's channels.
The arguments culminated in Sky stopping transmitting the Sky One and Sky Sports News channels on Virgin's service in 2007.
The new arrangement means that Sky will no longer have to pay to show Virgin channels, which also include Challenge, Challenge Jackpot and the Virgin 1 channel. It also brings Sky's HD services to a wider audience.
For Virgin, the deal generates what it called "substantial value" and signals a further move towards distributing TV content rather than owning it.
"It will allow us to focus more closely on our strategy of exploiting Virgin Media's super-fast connectivity to offer our customers a range of the very best content," said Virgin Media chief executive Neil Berkett.
The Virgin 1 channel is to be rebranded by Sky.
Sky is currently embroiled in a battle with media regulator Ofcom over its dominance of the market for premium sports and film channels.
This latest deal centres on basic channels, in which Sky has a small market share. If the Republic of Ireland regulator gives it the necessary go-head for the Virgin Media TV deal, Sky will have a 6.4% share of the basic channel market.
Earlier this year Ofcom ordered Sky to sell its premium channels available to rival broadcasters for 25% less than it currently does. The satellite broadcaster is appealing against the decision.