A substantial majority of UK composers, songwriters and music publishers has accepted terms for royalties based on digital sales.
The deal represents a partial settlement of a case currently being heard at the Copyright Tribunal and covers full-track downloads that are not ring-tones.
The three-year deal has been agreed between the MCPS-PRS Alliance (representing songwriters, composers and music publishers), music trade association the British Phonographic Institute (BPI), Apple's iTunes and UK mobile network operators O2, Orange, T-Mobile and Vodafone.
Under the terms of the new deal, composers, songwriters and publishers will earn eight per cent of gross revenue, less VAT, when their music is offered in a digital environment.
A lower rate of 6.5 per cent would be paid when it is offered in a service that is not considered to be on-demand.
"All parties to the settlement welcome this agreement, which will help drive the on-going growth of the legitimate digital music market," said a statement from the BPI.
"The UK music download market is the biggest in Europe with sales of 34 million units so far this year, according to the Official UK Charts Company, already more than in the whole of 2005."
The Copyright Tribunal will continue to deal with issues between the MCPS-PRS Alliance and the remaining parties, as well as looking at problems based on music shared by mobile network operators and iTunes.
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