Netflix will stream Disney movies to its US subscribers during the "pay TV window" starting in 2016, bypassing cable companies that previously held this arrangement.
"This is a big leap for internet television as it is the first time one of the big studios has signed with Netflix," said Netflix Director of Global Corporate Communications Joris Evers to TechRadar.
Included in this multi-year agreement are new movies from Disney, Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios and Disneynature.
While Netflix subscribers wait until 2016 for new movies to make it to their Instant Queue, they can enjoy older Disney classics right now.
Dumbo, Pocahontas and Alice in Wonderland are available to stream in the US starting today as part of a separate agreement between the two companies.
Not a Disney fairytale ending for Starz
Disney called this a "cutting-edge agreement" in a mutually released press release that cited Netflix's ability to stream to TVs, tablets, computers and phones.
Starz, the previous US cable company to make a deal for Disney movies, doesn't have the same technology range or subscriber count as Netflix.
However, Starz customers will continue to see new Disney movies until the Netflix deal kicks.
The Netflix-Disney deal seems to be good news for everyone but Starz. It's especially been a boon for Netflix investors today.
The Netflix stock price shot up more than 10 points, ending the day with a 14.01 percent gain.
This is in contrast to earlier this year, when Netflix's stock price was down 79.86 percent compared to its peak 12 months prior.
A stock surge and successfully inking a deal with Disney could mean that if Microsoft considers a Netflix bid, it might have to pay more for the recovering streaming giant.
Instant streaming rivals like Verizon and Redbox, which plan to launch Redbox Instant in 2013, may also be kept at bay without first access to Disney movies.
Just the latest big deal for Netflix, Disney
Netflix and Disney have been making big moves separately in the past year.
Netflix announced that it is releasing the once-canceled TV show Arrested Development as a complete season, and has found success in streaming to new Netflix customers in the U.K. and Ireland.
Meanwhile, Disney bought Lucasfilm for $4.05 billion in October.
Disney's purchase of Lucasfilm turns out to be icing on the cake for Netflix, as new Star Wars films will be part of the 2016 streaming agreement.