The brand says it will sign established and new artists to the new label, which builds on in-roads into music that the coffee chain has already made.
The chain has already released albums under the label Hear Music, which licensed songs from other companies. It has also struck exclusive deals to release albums in its stores, including Bob Dylan.
In 2005, Dylan signed a deal with Starbucks to exclusively sell some of his rarest tracks in its US coffee shops. It followed an earlier deal with Alanis Morissette to sell an acoustic version of her 1990s album, 'Jagged Little Pill'.
Under the new label, Starbucks Records, the chain will be able to pick and choose artists and music that adhere more greatly to its brand identity.
No artists have officially signed to the record label yet, which is due to launch in the upcoming weeks. An official announcement regarding artists will be made then, but it has been reported that Paul McCartney is being chased by the label to sign his new album with them.
Starbucks has opened four Hear Music Coffeehouses where visitors are able to purchase music and burn it to CDs.
Hear Music's greatest success to date was co-producing the 2004 Grammy award-winning 'Genius Loves Company', a duets album featuring late soul singer Ray Charles. This album was produced in cooperation with Concord Records and won eight posthumous awards including 'Album of the Year'.