While the music industry has sought to forge a variety of new digital models in line with changing consumer behaviour, YouTube has also recently been embroiled in disputes over showing licensed music videos in both Germany and the UK.
The new portal is set to be launched later this year, and will contain content from all of Universal's main artists, while users will also be able to use footage from the website in their own videos.
Vevo will operate both a standalone service and a channel on YouTube, with the two partners in the joint venture sharing any advertising revenues generated by the scheme between them.
Videos from Vevo will also be available to embed on other web platforms for no charge.
Eric Schmidt, chief executive of Google, said his company was "committed to promoting greater innovation and choice" and argued that Vevo would benefit "consumers, advertisers, content creators and the music industry at large."
Data sourced from Financial Times; additional content by WARC staff