The deal will see the two networks combined over the next few years, with newly built 3G networks being deployed to provide both companies' standard offerings.
Both operators will continue to manage their own traffic independently and will still compete in the UK mobile wholesale and retail markets.
The agreement is confined to mobile services and does not encompass any fixed access networks.
"This represents an important step in the evolution of the UK mobile market, " said Orange UK chief executive Bernard Ghillebaert.
"As the industry matures we must look at new ways to serve our customers and this provides a common sense approach to network roll out and management in the 21st century."
Nick Read, chief executive at Vodafone UK, added: "This proposal will enable the two companies to remain vigorously competitive against each other and the market, while realising the proven benefits of network sharing, notably faster roll out of high speed mobile services in the future and the earlier introduction of innovative products."
Analysts suggested that the move made sense because UK mobile operators have a roughly equal market share and need to keep costs down to maintain profits.
"Vodafone and Orange have taken a big step forward in reducing future costs by agreeing to share 3G radio access networks," said John Delaney, principal analyst at Ovum.
"Vodafone estimates that the move can reduce capital and operating expenditure costs by 20 to 30 per cent, assuming full 2G and 3G consolidation."
Delaney added that the deal would also help both companies increase their coverage in the UK.
"All operators have local areas where their coverage is not as good as others and by sharing each others' networks, Orange and Vodafone can extend their service coverage into some areas where their coverage is currently poor by using each other's base stations," he said.
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