UK streaming subscription service BritBox will launch later this year at £5.99 a month, the BBC and ITV have said.
The broadcasters said Britbox, which they hope will counter competition from US giants, will cost “less than other streaming services”.
BritBox, billed as being “truly British”, will launch in the UK between October and December.
As well as boxsets, it will feature new shows commissioned especially for the service.
The launch comes after global giants such as Netflix and Amazon have made their mark on British homes.
But the BBC and ITV said there is “a real appetite among British viewers for a new British streaming service – in addition to their current subscriptions”.
The Competition Commission previously vetoed a similar joint British service, suggesting that viewers had not demonstrated an appetite for US shows.
ITV chief executive Carolyn McCall said the launch announcement was “a milestone moment”.
She said: “Subscription video on demand is increasingly popular with consumers who love being able to watch what they want when they want to watch it.
“They are also happy to pay for this ease of access to quality content, and so BritBox is tapping into this, and a new revenue stream for UK public service broadcasters.”
She said Britbox would contain “the largest collection of British boxsets ever – bringing the very best in past, present and future British programming and award-winning content to viewers all in one place”.
BBC Director General Tony Hall said: “We have a world-beating TV industry with outstanding content. The BBC and ITV are at the centre of that.
“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…
“With a remit to be daring and different, many future classics will be commissioned and live on BritBox for the future.”
The first newly-commissioned show will be available to BritBox viewers from 2020.
Shows such as Love Island, Gentleman Jack, Gavin & Stacey, Victoria, Happy Valley, Broadchurch, Les Miserables, The Office and Benidorm will go on the service.
BritBox said the £5.99 cost in HD includes multiple screens and devices.
Netflix announced earlier this year that it was raising prices.
The price of a basic plan, which allows viewing on a single device and only in standard definition, remains unchanged at £5.99.
But its standard plan, which lets customers watch two screens at a time and offers HD viewing, increased by £1 to £8.99 a month, while its premium offer, which allows for four screens at a time and offers ultra HD, went up by £2 to £11.99 a month.
BBC boss Lord Hall has dismissed complaints that viewers will have to pay twice for its shows with the launch of the service.
Some have questioned why they should pay again for BBC hits, having already been charged the £154.50 licence fee.
BritBox will be an ITV-controlled venture, with the broadcaster initially holding 90% and the BBC holding 10% of the equity.
The launch comes after the BBC announced that from June next year, free TV licences will be restricted to over-75s who claim pension credit.