Sky is to waive charges which have been eating up millions of pounds of licence fee money each year to allow the BBC's channels to be carried on its services.
The issue had been a cause of controversy for a number of years with Sky charging what is thought to be around £4.5 million annually to carry the BBC's various stations.
Culture Secretary Maria Miller said last year that the charges should end in a speech to TV executives, in which she told them: "Our public service broadcasters should not have to pay other platforms and service providers to carry their content, especially given the clear value this content provides."
The BBC and Sky announced they had reached a new agreement today with the payments dropped completely.
In a joint statement they said: "Sky and the BBC have reached an agreement which reduces the BBC's payments for platform services to zero.
"Alongside this, both parties have reached an agreement that secures the long-term availability of BBC channels and BBC iPlayer on the Sky platform. We will also continue to discuss opportunities that offer Sky customers new and innovative ways to discover and consume BBC content."