China's tech duo, Tencent Holdings and Alibaba Group Holding, have reached an agreement about shared music licensing, a move that is likely to have a huge impact on the country's music streaming sector and jumpstart its paid-for music segment.

In a joint statement on Tuesday, Tencent's subsidiary Tencent Music Entertainment Group said it will sub-license music from record labels including Sony Music, Warner Music, and Universal Music to Alibaba, while the latter's music unit, Ali Music Group, will give Tencent its exclusive rights bought from Rock Records, HIM International Music, Bin Music, and Media Asia Group.

The pact will allow for the exchange of millions of record labels and global recording stars on their respective streaming platforms, from Alibaba's Xiami to Tencent's QQ Music, Kugou and Kuwo.

The companies said they hope the agreement will move the industry forward by protecting copyrights and encouraging more musicians and songwriters to come up with original and high-quality products.

While offering most of the content for free, the pair will encourage users to adopt subscription plans and improve the user experience with tailored music recommendations.

Tencent's three distributing platforms combined to provide more than 60 percent of China's music streaming, according to consultancy iiMedia, followed by Alibaba's near 10 percent. Another major player, NetEase Music, came third with 6.9 percent.