Qantas flights to Europe will now stop over in Dubai under a 10-year partnership signed between the Australian airline and Emirates.
Qantas chief executive Alan Joyce on Thursday said the partnership was the most significant the airline had ever signed.
The arrangement, which requires approval from the Australian Competition and Consumer Commission (ACCC), is expected to start in April 2013.
"This is the most significant partnership the Qantas Group has ever formed with another airline, moving past the traditional alliance model to a new level," Mr Joyce said in a statement.
"It will deliver benefits to all parts of the group.
"As the world's largest international airline, with a network that perfectly complements our own, Emirates will help us give our customers across Australia a dramatically expanded range of travel options.
"Together with Emirates, Qantas will provide a unique one-stop hub service, as well as deeply integrated frequent flyer and customer benefits."
Under the deal, Qantas will fly daily A380 services from both Sydney and Melbourne to London via Dubai.
Between the two airlines there will be 98 weekly services between Australia and Dubai.
Qantas shares rose on the news, up 6.5 cents, or 5.8 per cent, to $1.19 at 1015 AEST.
The Emirates deal would provide a boost for Qantas' loss-making international airline, Mr Joyce said.
"A key objective is to make Qantas International strong and viable, and bring it back to profitability," he said.
"This partnership will help us do that, while building on our strengths in Qantas Domestic, Qantas Frequent Flyer and (low-cost carrier) Jetstar."
The changes would impact on some roles at Qantas, with its Frankfurt services to be withdrawn, he said.
There also would be changes to the type of aircraft Qantas used in Asia, he said.
"We will be working through all these and other changes with our people, as with all relevant stakeholders," Mr Joyce said.
Qantas will terminate its agreement with British Airways from March 2013 as a result of the Emirates deal.
The British Airways agreement began in 1995.
"Over the past 17 years, the joint business with British Airways has been central to the Qantas network," Mr Joyce said.
"However, global operating conditions have changed and partnership with Emirates is the right strategy for Qantas."