The cooperation is scheduled to start on July 1 2012 and will enable digital service providers to acquire licenses for BMG's Anglo-American repertoire for all of Europe directly from GEMA, benefiting cross-border digital music services in particular.
"BMG is a start-up of the digital age, and we see technology primarily as an opportunity for the music industry," said BMG CEO Hartwig Masuch.
"This cooperation with GEMA is an important step in the right direction, offering digital service providers one-stop licensing of our Anglo-American repertoire across Europe.
"The advantages include easier access to our repertoire for digital music service providers and simplified, more transparent and faster accounting for our songwriters," he added.
Chairman of GEMA's executive board Dr. Harald Heker commented: "The signing of the agreement shows once again how much copyright holders trust GEMA.
"We are very pleased with the agreement with BMG Rights Management. Through this additional cooperation for the licensing and administration of mechanical online rights in all of Europe, GEMA is in the best position to grant rights in the online area, which has a promising future."
President Creative & Marketing, BMG North America, Laurent Hubert added: "Simplifying the licensing process and speeding up payment to writers is one part of the picture, but of equal importance is the ability the deal gives us to actively seek out new opportunities and experiment with new business models.
"This deal is about unlocking the enormous potential of music's digital future."