The agreement will allow the firm to design and distribute exclusive George Michael merchandise globally.
"Original and bespoke products" planned include limited edition prints, flasks, stationery, apparel and limited-edition figurines and special items created by guest fashion designers.
“It’s an honour to be able to continue George’s incredible legacy. This partnership is an opportunity to remind fans of his cultural influence, boundless creativity and what a truly phenomenal artist he was,” said Nicola Tuer COO, Sony Music UK & Ireland.
Kontraband's general manager Elliot Taylor added: “We are thrilled to be launching a brand-new selection of products showcasing the legacy of George and giving fans the overdue opportunity to own much anticipated official merchandise.”
Welcoming the deal, the George Michael Estate issued a statement saying the merchandise will be created with the late singer-songwriter's artistic values in mind.
“We are delighted to collaborate with the team at Kontraband to curate an exciting collection that creatively sets the bar and offers George’s loyal and new fans a unique range of merchandise he would be proud of,” they explained.
The exclusive deal expands Sony's deal with the estate and is the first George Michael merchandise agreement since 2011.
Sony Music acquired merchandise firm Kontraband last year.