The BBC and ITV are to launch a free-to-view satellite TV service to cater for viewers unable to receive Freeview digital coverage.
Freeview is received through TV aerials without paying a subscription
ITV announced plans for the service, to be called Freesat, on Wednesday.
Freesat, to be launched early in 2006, will rival BSkyB and will carry all BBC and ITV digital TV, interactive and radio services plus other channels.
BBC director general Mark Thompson said the announcement "paved the way" for nationwide free digital television.
Mr Thompson said he welcomed ITV as partners in the project "to develop a consumer friendly, subscription-free satellite proposition".
"The huge success of Freeview, already in more than five million homes, demonstrates how highly free digital television is valued by many people," he said
"Our long-stated aim has been to bring about an open market in subscription-free satellite services so we can ensure free access to all the BBC's services across the country in the run-up to switchover and beyond."
The government plans to switch off analogue TV signals, region-by-region, by 2012.
Sky launched its own free satellite service - called "freesat from Sky" - last October, which allows access to 140 non-subscription channels for a one-off fee.
ITV's chief executive Charles Allen said the company would also start broadcasting its channels "in the clear" in the next few months, meaning the channels can be watched through any satellite receiver.
ITV currently encrypts - or scrambles - its transmissions via satellite, using the service provided by Sky.
He said: "We want our channels to be available to as many people as possible, regardless of technological and geographical constraints.
"As we move from analogue to a digital environment, Freesat - and Freeview - will enable every family in the UK to enjoy a wide range of quality channels for free."
A recent Ofcom report said more than 60% of UK households now receive digital TV.
Approximately a quarter of TV viewers live outside the Freeview coverage area.
ITV has also launched a new service to allow mobile phone users to watch highlights or footage of favourite programmes such as This Morning, Coronation Street, and I'm A Celebrity... Get Me Out of Here!
The service, available on mobile phones with internet access, will also include showbiz news and gossip, competitions, games, ringtones and a TV reminder service.
ITV is also to trial a local TV service on broadband in the Brighton and Hastings area, containing local news and weather, community activities, travel and property advertising.