The deal will see the creation of the much sought-after one-bill service.
Both BT and Vodafone customers will be sent a single bill for their fixed line and mobile calls - an option analysts believe is the holy grail for telecoms providers.
BT will scrap its existing partnership with former mobile arm mmO2, which provides calls for its business customers, and T-Mobile, which provides calls for its consumer business, and will now rely solely on Vodafone.
The link is likely to enrage both BT's and Vodafone's rivals, which will look to Ofcom to investigate the multimillion-pound agreement.
BT has forged the deal because it is desperate to become a major force in the mobile arena. Despite the high-profile introduction of its BT Mobile consumer service at the end of last year and a £5m marketing campaign to promote the scheme, fewer than 50,000 customers have signed up.