Spotify has been trying to sign similar long-term deals with big labels, including Sony and Warner, ahead of a possible stock market flotation.

Artists on Universal may now offer their music on Spotify's Premium tier before they appear on its free service.

Universal artists would gain greater flexibility, said Spotify.

"Starting today, Universal artists can choose to release new albums on Premium only for two weeks, offering subscribers an earlier chance to explore the complete creative work, while the singles are available across Spotify for all our listeners to enjoy," said Daniel Ek, chairman and chief executive of Spotify.

Spotify is still loss-making and started only nine years ago, but it now has 100 million users and 50 million subscribers and is a dominant force in the global music industry.

Sir Lucian Grainge, chairman and chief executive of Universal, said: "Working hand in hand with these digital services brought us the industry's first real growth in nearly two decades."

"Today, streaming represents the majority of the business. The long-term success of Spotify, and others like it, is essential to the ecosystem's enduring health," he added.