Watching football matches in pubs is becoming an increasingly popular option among football fans and until now Sky has been virtually unchallenged in the market, worth an estimated £25m.
ONdigital, which is in the process of being transformed into ITV Digital, currently offers a limited sports service to pubs that includes coverage of tennis matches and Champions League football matches.
The new package from ITV Digital aims to undercut Sky's by around half, although it will show fewer matches. ONdigital will charge between £30 and £355 a month for a package, which will include 40 pay-per-view Premier League football matches plus ITV's European Champions League coverage.
Sky's offering ranges from £33 to £870 a month. It is estimated that between 30,000 and 40,000 UK pubs subscribe to Sky's service at an average price of between £400 and £500 a year.
ITV Digital's package is expected to be popular with smaller pubs, which find Sky's offering too expensive.
In separate news, ITV Digital shareholder Carlton is this week expected to announce reduced pre-tax profits after it increased investment in its joint venture digital service, while advertising revenues continue to decline.
Analysts predict that the company's interim profits will come in at around £62m after it ploughed £120m into ITV Digital.
The company will need to outline cost cutting measures, as shareholders fear the company is losing audience share among 18-30 year olds.
Shareholders and analysts are also said to be seeking reassurance about the company's plans to stem advertising losses, or at least some indication of when the decline will end.