The new model, dubbed "iTunes Plus", will feature songs with better audio quality.
Apple has struck an agreement with Sony BMG, Universal, and Warner Music to drop the digital rights management (DRM) protection currently attached to iTunes music.
The changes were announced at the end of the keynote address, at the Macworld conference in San Francisco.
Apple's senior vice president of worldwide product marketing, Phil Schiller, delivered the speech, traditionally given by Steve Jobs, who has faced questions of the state of his health.
Schiller said: "Over the past six years, songs have been $0.99 [prices in the UK have varied].
"Music companies want more flexibility. Starting today, eight million songs will be DRM free and by the end of this quarter, all 10 million songs will be DRM free."