Under the alliance, BTopenworld will undergo a major transformation to enhance its broadband service, which will be renamed BT Yahoo! Broadband.
The service will look to combine the strengths of Yahoo!'s web content and services, backed by BT's web access. BT will handle delivery, customer service and billing for the service.
Both broadband and narrowband customers signing up to the new package will be able to customise their homepage and browser. They will also benefit from a built-in firewall and anti-virus protection at no extra cost.
Customers will be able to access a range of applications, designed to make the most of high-speed access, such as interactive gaming and video.
BT Yahoo! Broadband will be available to new customers from September, and existing BTopenworld broadband customers will move to the service in a phased programme.
Mark Opzoomer, managing director and regional vice-president of Yahoo!
Europe, said: "This is part of Yahoo!'s extensive strategy to increase direct relationships with users."
Pierre Danon, chief executive of BT Retail, added: "I believe that such a compelling product will provide a significant boost to our broadband sales."
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