The £17m deal will see ITV Digital channels broadcast on Sky's satellite system, according to a report in the Sunday Telegraph. Sky will broadcast ITV1 and ITV2, as well as ITV Digital's sports channels.
BSkyB and ITV have been in dispute for three years over what ITV channels Sky will run on its service. According to an ITV source quoted recently: "Our relationship with Sky has been wholly antagonistic but we all know the industrial logic of cooperation is compelling."
The deal will likely be welcomed by ITV investors who have been pushing for Carlton and Granada to abandon the loss-making digital venture, which has lost more than £400m since it was first launched as ONdigital.
In September, it was reported that ITV chiefs wanted to come to an agreement that would see Sky and ITV Digital cooperate on the rollout of digital television services rather than continue to do costly battle.
One suggestion at the time was that BSkyB could take a stake in ITV Digital. However, this could possibly run into problems with UK competition authorities and is now seen as highly unlikely.
The agreement will bring much relief to ITV as the deal represents millions of pounds in advertising revenue, which would have been lost if it had not been signed. One report put the figure at £200m a year.
Sky viewers could have access to ITV channels as early as this week with an official announcement expected later today.
It will mean that Sky's 5.3m viewers will no longer have to switch off their set top boxes and revert to analogue TV to watch ITV.
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