McDonalds and Pepsi to sponsor channel through advertising.
Apple is set to launch iTunes Radio in the US in September, with global brands including McDonalds, Pepsi and Nissan among advertisers.
Deals with the brands range from "the high single-digit millions of dollars to tens of millions of dollars," through 12-month campaigns according to sources cited by the advertising industry site AdAge.
Audio advertisements will run on the service at a rate of one every 15 minutes, with video ads playing roughly every hour, the report said.
The video commercials will play at times when listeners are more likely to be looking at the screen, such as when they are skipping a track or after hitting play.
Users can avoid ads altogether if they purchase iTunes Match, a cloud-based storage feature that allows people to access their iTunes library via any device.
iTunes Radio will not be a direct competitor for streaming music services such as Spotify and Deezer as it will not provide on-demand music, but will allow users to ‘curate’ their own stations based on their preferred artists or genres.
It will initially be released in the US and there are currently no set plans to roll out the service to the rest of the world. The company’s senior vice president Eddy Cue said that Apple would be "adding other companies over time" when the project was announced.