The joint venture will develop, produce, finance, market, acquire and distribute films from emerging directors around the world.
The partnership between new media company Vice, which secured a further $500m (£303.8m) in financing in September, and 20th Century Fox, makers of blockbusters Avatar and Dawn of the Planet of the Apes, promises to create a major force outside of the mainstream film business, with the ambition to release "at least two films a year".
The partnership will look to both theatrical and new digital business models for distribution.
Fox has committed to bringing its "best-in-class global film development, production and distribution capabilities in all media", while Vice will lead creative development and use its global marketing and online activation expertise.
In 2014, Vice has already started to gain a reputation for producing bold and daring films. One of its productions, Fishing Without Nets, about Somali pirates, won a directing award at Sundance, and there was further critical acclaim for skateboard documentary, All This Mayhem and the incongruous vampire spaghetti western, A Girl Walks Home Alone At Night.
As part of this joint venture Vice will also have a "first-look" production deal with 20th Century Fox, giving Vice the opportunity to develop larger budgeted films as well.
In further synergy, Fox will have an opportunity to develop material based on Vice's library of unique stories for potential feature films.
The leaders behind the deal
The new venture has been brokered by Jim Gianopulos, chairman and chief executive of 20th Century Fox and Shane Smith, chief executive of Vice, together with chief creative officer, Eddy Moretti.
Moretti will become head of Vice Films while Vice's executive creative director, Danny Gabai, will head up development and oversee creative on production and marketing.
Sanford Panitch, the president of Fox International Productions, and Salil Mehta, president of Content Management, will oversee Vice Films for 20th Century Fox.
Moretti said: "Vice Films is the beginning of an exciting new chapter for Vice. The success of Fishing Without Nets, A Girl Walks Home Alone At Night, and All This Mayhem showed us that we can play a vital role supporting exciting, bold, and visionary filmmaking.
"In partnership with Jim and his excellent team at Fox, we will build a new global home for cinematic creativity, supporting filmmakers from development to distribution, and creating a new business model for the industry along the way.
"But at the heart of this partnership is our love of cinema. Vice is committed to the enduring artistic and cultural relevance of the two-hour narrative."
Gianopulos said: "Vice is a bold, groundbreaking new media company that allows us to reach an audience that is focused online and consumes its news and entertainment across many media platforms.
"Vice not only knows how to reach that audience but markets to them better than anyone else out there. We’re very proud to embark on this exciting venture with our new partners."
The rise of Vice
Vice has cut a swathe through traditional media landscape with its strong connection to the under-35 audience.
Having started life in Montreal 20 years ago as an offbeat youth magazine, Vice is now a multimedia operation in 36 countries, employing more than 1,500 people and growing.
In September, a $250m investment by media company A&E Networks, a joint venture between Disney and publishers Hearst, and $250 million from Silicon Valley investors Technology Crossover Ventures (TCV), helped value the company at $2.5bn and is fuelling an aggressive international growth strategy.
Sitting among Vice's media portfolio, and launched in March 2014, is Vice News, a dedicated digital platform covering news from around the world, but often in a gonzo style never seen before.