The package costs £10 per month and includes Sky Box Sets, which is normally £5pm.
Firstly, Spotify (already available as a Sky Q app) will join Netflix in being offered up as part of an integrated billing system on your Sky bill each month.
The type of Netflix subscription on offer depends on your Sky Q package. Existing Sky Q customers with Netflix will be able to easily move their account to the new pack or sign in to the Netflix app on Sky Q using their existing Netflix account details.
So, simply put, there are two tiers for Netflix on Sky Q: Sky Q Entertainment customers who subscribe to Ultimate on Demand and get standard-definition Netflix integrated into their TV box, or Sky Q Experience customers, who get the 4K Netflix Premium integrated via Ultimate on Demand into their TV box. The two services remain isolated from each other, which also prevents the multiple Netflix profiles that you may share among your family from influencing your Sky viewing recommendations - a plus if you let your loved ones run riot with your Netflix account.
Ultimate On Demand will be available before the end of the year.
Note: You will need to have an existing Sky Q Entertainment subscription (£20 per month).
Sky will then contact Netflix and do all the paperwork so you'll start paying for Netflix via your Sky bill.
Commenting on today's news, technology, media and telco analyst Paolo Pescatore said the Netflix deal "further increases Sky's own value as a one stop shop provider".
This option won't show Netflix content on the homepage but the app can be launched via the remote and by voice recognition. It means you can have seamless searching across both libraries and have easier access to more content without having to load up additional apps.
This will place Sky original shows such as Patrick Melrose, Save Me and Tin Star as well as HBO's Game of Thrones alongside Netflix original content such as The Crown, Stranger Things, The Kissing Booth, Making a Murderer and Queer Eye.
Sky UK and Ireland chief executive Stephen van Rooyen said: "We want Sky Q to be the number one destination for TV fans".
You can find out more about Netflix on Sky Q, including the new features it adds, here: How Netflix works on Sky Q: Your questions answered.