Viewers will have to sit through two 30-second spots and a short 4oD ident when the strategy launches, days before ITV is due to launch its own broadband TV operation.
C4 said programme sponsors would also be given the opportunity to extend their on-air association with a 10 second sponsorship clip played immediately before programmes start, although it has not revealed what they will have to pay for the privilege.
Channel 4 launched its VOD service in December as a mainly pay per view offering, despite widespread doubts over whether viewers would spend enough money on downloads to make it viable.
However, the latest move is not a complete U-Turn.
The broadcaster's premium US imports and its Channel 4 archive, featuring thousands of hours of programmes such as Queer As Folk, Trigger Happy TV and Drop The Dead Donkey, will remain available on a pay-per-view basis with single, advertising-free episodes available for download for 99p.
Chief executive Andy Duncan said C4 was a "pioneer" in the field and admitted it was still experimenting with a range of business models.
With no major advertising market yet established in the UK for VOD content, C4 is also planning to launch a subscription offer later in the year - another attempt to build up a revenue stream
Rod Henwood, new business director at the broadcaster, claimed that there had been strong early demand from customers and advertisers for the service, adding: "Our own early evidence is that the appetite for both business models is strong."
The free catch-up service will be available both streamed and downloaded on the 4oD PC platform.
ITV plans to launch its broadband strategy on March 31, including signing up companies including Vodafone and Sony, as launch partners, in a range of different types of VOD advertising, including pre-rolls.
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