The new stream, which will be entirely in English, is expected to go live in early 2009.
The service will be available from early morning till late at night targeting Western and Central Europe and a potential audience of 170m listeners with global news and current affairs and a rich mix of in-depth analysis, documentaries and cultural programmes.
The service will provide a multimedia offer of audio and text, the latter coming automatically from the BBC News website.
Eric Betterman, director general at Deutsche Welle, said: "It is great that two of the world's most established broadcasters can work together on a project of this scale. This is an exciting venture that will offer European listeners top class content and provides the perfect opportunity to reintroduce listeners to DRM."
Mike Cronk, controller, Future Media, Technology & Distribution, BBC World Service, said: "This is an important time for DRM and a huge opportunity for broadcasters across Europe to look at the potential for new services and reaching new audiences.
"With this announcement, two of the most important players in international broadcasting are re-affirming their faith in the DRM standard."
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BBC World Service to launch radio venture with Deutsche Welle
LONDON - BBC World Service and Deutsche Welle, the German international broadcaster, have teamed up to launch a joint digital radio service aimed at 170m Western and Central European radio listeners.