The deal, believed to be worth £40 million over the next five years, has led to increased speculation that James Murdoch, the chief executive of BSkyB, could be preparing to make a bid for five.
The loss of the critically acclaimed five news contract is a blow to ITN, which is majority owned by ITV. ITN was formerly the designated news supplier to all of the terrestrial channels, except the BBC.
ITN has supplied five's news output since it launched in March 1997 but recently five has had increasingly close links with Sky. The Sky News Sunrise show has been simulcast on five on Saturday mornings since 2002. The five contract means that Sky News will now be available in more than 20 million UK homes.
The deal gives five access to a dedicated team of 60 reporters and technicians and to Sky News' eight regional and seven international bureaux.
Five's senior programme controller, Chris Shaw, said: "Sky News is an award-winning, proven news service. It was a difficult decision to move from ITV, which has done a fantastic job over the past seven years, but this will mean a bigger, better news for our viewers."
Sky News takes over the contract from the beginning of 2005.
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