The move by Desmond means that OK! will sell for half the price of Hello magazine, priced at £2.
The 99p priced OK! is now on sale in newsagents. Hello is thought to have no plans to cut its own cover price.
A spokesperson for the National Federation of Retail Newsagents (NFRN), the trade body for independent newsagents, said she believed the slashing of the OK! cover price is likely to be long-term.
OK! suffered a double-digit year-on-year fall in the latest round of circulations figures.
In the final six months of 2011, OK! registered an average weekly circulation of 388,472, down 13.9% on the year, and down 17.9% on the period.
By comparison, Hello! reported an average weekly circulation of 373,266, down 8% on the year, and down 9.7% on the period.
The price-slashing of OK! mirrors a similar move by Desmond's Sunday tabloid newspaper, which has halved its cover price from £1 to 50p.
Desmond slashed the price of the Daily Star Sunday to match the arrival of Rupert Murdoch's 50p Daily Star Sunday.
Northern & Shell said: "With some great exclusive wedding issues coming up and the commemorative issues for the Royal anniversaries in April and June we are looking at an outstanding year."
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