The deal means that 1.7 million Tiscali broadband subscribers will be able to view Sky One, Sky Two, Sky Three and the broadcaster's arts, travel and news offerings should they pay to expand their content packages.
Tiscali will set a new pricing scheme to include the Sky channels within the next few weeks.
The partnership with Tiscali is a boost to Sky following its recent split with Virgin Media. Sky lost access to 3.3 million subscribers when talks about continuing an agreement to broadcast channels on Virgin Media broke down.
The Tiscali deal is part of Sky's investment in its digital channels over the past five years. Mike Darcey, chief operating officer at Sky, claimed that the broadcaster has upped its investment in its basic channels by 70% over a five-year period.
Italian company Tiscali is one of the biggest ISP and telecoms firms in Europe, but has recently made several moves into media. The latest involved Tiscali creating a movie download service on its portal. The Movies Now section of its website lets users watch films for a price dependent on the desired quality.