Tim Cook, Apple CEO, announced Apple Music, saying: "It will change the way you experience music forever."
The service will launch with what Apple claims is "the first 24/7 worldwide radio station", called Beats 1. It will broadcast from three cities around the world - New York, Los Angeles and London - hosted by Zane Lowe, Ebro Darden and Julie Adenuga.
Apple Music will be available on Apple devices and PCs from 30th June, while an Android app will launch in the Autumn.
The new iTunes streaming service will launch with a 3-month free trial, following which it will cost the industry standard £9.99 per month. There will also be a family plan for up to six people for £14.99 per month.
Sadly there was no mention of CD-quality, lossless streaming - let alone high-res audio - so we assume that Apple Music will offer up to 256kbps AAC streams from the existing iTunes library.
A "revolutionary streaming service", Apple Music will put your own music and the 30-million track iTunes library all in the same Music app, a little like Google Play Music.
Choose your own tunes or take advantage of playlists, with Apple, much like Tidal, putting curated content at the centre of the service. A "For You" section of the app will aim to deliver music personalised to your tastes.
Content partners also include the likes of Q magazine, Pitchfork and DJ mag.
Siri, which is set to get a number of new updates in iOS 9, is also designed to work seamlessly with the new app, allowing you to voice search not just simply by artist and track but also with search queries; "What was the number one song in February 2011?", is one example Apple suggests.
As well as the Beats 1 radio station, there's a new Apple Music Radio, giving you a mix of music curated by genre. And you can also skip through tracks if you don't like what you hear.
More after the break
The service, which is based on the Beats Music user interface, will also offer HD music videos and has offline playback.
Apple has also launched Apple Music Connect, which promises to connect artists with fans by allowing artists to upload content to the app. This could include photos, videos and exclusive songs.
Apple Music is launching on 30th June with a three month trial. It'll cost £9.99 per month and there will be a £14.99 family plan.
Apple Music is available on iPhone, iPad, iPod Touch, Mac and PC. The app will come to Apple TV and Android "this Autumn".