The deal will propel Blue to a global stage and will see them reportedly replace Britney Spears. They were reported to have been picked ahead of the likes of Justin Timberlake and Jennifer Lopez.
They are believed to have chosen because the band, whose 'One Love' album went to number one, are on the verge of cracking America. The band recently had a big hit with their 'Sorry Seems to Be the Hardest Word', a duet with Sir Elton John, and have racked up three number one singles.
Pepsi, which is distributed in the UK by Britvic Soft Drinks, made the announcement this morning, but refused to confirm the £50m figure attached to the deal by The Sun newspaper.
Adrian Troy, Britvic carbonates controller, said: "Blue has gone from strength to strength over the last few years and is the ideal band to drive Pepsi’s 'Ask for More' campaign in the UK. The partnership, in line with Britvic’s Right Choice soft drinks management programme, will appeal to Pepsi’s core audience, which will in turn grow sales and profits for our customers."
Pepsi recently faced the wrath of rappers after hip-hop mogul Russell Simmons accused the soft-drink maker of hypocrisy for dumping one foul-mouthed singer, Ludacris, only to replace him in its advertising with Ozzy Osbourne.
Pepsi ran a series of ads featuring members of the Osbourne family, which aired earlier this year in the US to coincide with the Superbowl.
Last year it also signed Beyonce Knowles, the lead singer of R&B band Destiny's Child, is to star in an ad campaign.
The London band, whose members are Lee Ryan, Duncan James, Antony Costa and Simon Webber, will front Pepsi's advertising and will have their concerts sponsored by the soft drinks firm.
In the past, Pepsi has sponsored such global stars as Madonna, Kylie and Michael Jackson.
Talks with Pepsi and Blue are understood to have been ongoing for months. The drinks firm did not renew its deal with Britney as the once princess of pop saw her fortunes decline.
Duncan James told The Sun: "Pepsi has signed some of the biggest names over the years. We are really flattered we will now be part of that."
Pepsi's roster of agencies include Abbott Mead Vickers BBDO, for advertising; Mindshare for media buying and planning; KLP Euro RSCG and Poulters for sales promotion; and Ketchum Life for consumer PR.
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