Omnifone is working on the technology needed for the service, which will allow any broadband user – not just the two million signed up to Sky's own broadband network – to listen to as many tracks as they want through their PC or TV.
Users can also download and keep their favourite tracks which are free of Digital Rights Management (DRM) software, so they can be played on any portable MP3 music device.
Sky announced its plans to enter the digital music market last July after signing a deal with Universal Music Group, which represents artists such as U2, Amy Winehouse and The Killers. It hopes to launch the new service this spring.