Iceland will now be selling food in home and garden store The Range.
The new "strategic alliance" will initially be introduced in three stores in the Midlands and Liverpool areas.
In a joint statement the companies said plans for a further roll-out of the "store-in-stores" concept will follow.
Iceland chairman Sir Malcolm Walker said: "The ethos of The Range - to bring our customers great quality products at the most competitive prices - is absolutely identical to Iceland's.
"So I feel that we make natural partners in this new alliance. We look forward to make our unique food range available to more customers in a new type of location, where we hope that we can extend our appeal by reaching people who have not shopped at Iceland before."
The Range has 150 stores across the UK.
"This alliance is so exciting," founder Chris Dawson added.
