Initially the site will feature short films, taking towards screening longer content and moving beyond the 10-minute limit it has currently imposed on videos running on the site.
Film-makers will receive the majority of the ad revenue that their films generate from visitors viewing their material.
YouTube will begin by featuring four new short films every two weeks, as well as feature films. This will opening the way for new directors and writers to win a wider audience leading to possible distribution deals.
The site aims to offer a new screening method for film-makers, who currently rely on their work being picked up by a film company at a festival such as Sundance, where Kevin Smith's 'Clerks' was snapped up.
Showcased films on YouTube will be available for purchase via a link to sites selling the film-makers work. Films will be chosen by a YouTube editorial panel, which will also look to film festivals such as Sundance for possible material.
At the beginning, short films will be shown from the UK, US, Canada, Norway and Sweden. The service will then be expanded to other countries in the coming months.
The films will include both those that have been shown before and others that have never been screened in front of a wide audience.
Sara Pollack, YouTube's film and animation manager, said: "Hopefully as they see thousands of people watching their films, it's going to be a very eye-opening experience."
Among the first to be shown are 'Love and War', which is a stop-motion puppet movie by a Swedish director; the Oscar-nominated short 'I Met the Walrus', about an interview with John Lennon; and 'Are You the Favourite Person of Anybody?' by performance artist Miranda July.