YouTube has struck a deal with a group of independent record labels for a new subscription service to rival Spotify and Apple's Beats Music, the Financial Times reported on Wednesday.

The Google-owned online media service came to an agreement with rights agency Merlin following months of negotiations, the newspaper said, citing sources familiar with the matter.

Google declined to comment directly on the report but said that "hundreds of major and independent labels" have already partnered with YouTube as it expands into a subscription service.

It pointed to an earlier statement in which it voiced hope that YouTube will serve as "a global platform for fans and artists to connect, and as a revenue source for the music industry."

Contacted by AFP, Merlin declined to comment on the report.

Record labels representing 95 percent of the music industry have already signed up to the new terms but Merlin, which represents more than 20,000 labels from 39 countries, had been holding out.

YouTube earlier this year threatened to block the videos of artists like Adele and the Arctic Monkeys on its free site if they did not sign up to the terms of the subscription service.

YouTube is the world's biggest online source of free streaming music and the site has around one billion users a month.