Disney and its subsidiary, Marvel Studios, will attempt to tap into the increasingly lucrative Chinese box office by filming parts of Iron Man 3 in China, and co-producing the movie with Chinese company DMG Entertainment.
Filming on the third instalment of the superhero franchise is due to begin in the US in May, before moving to China in the summer.
Robert Downey Jr is set to reprise his role as industrialist Tony Stark, aka the metal-suited Iron Man, with Gwyneth Paltrow and Don Cheadle also among the cast.
Rob Steffens, general manager of operations and finance for Marvel Studios, said of the deal: “Adding a local flavour, and working with our new local partner, will enhance the appeal and relevance of our characters in China’s fast-growing film marketplace.”
Dan Mintz, head of DMG Entertainment, called the collaboration a “milestone” in global entertainment.
“This signifies the first multi-billion dollar franchise to be produced between Hollywood and China,” he said.
Foreign studios and distributors are keen to break into the world’s fastest-growing movie market, which last year saw takings increase by almost 30 per cent, up to 13 billion yuan (£1.3 billion).
Despite a limit of 20 foreign movies currently allowed to screen in China each year, films from abroad accounted for just under half of box office earnings in 2011.