Nestlé Japan is entering a joint venture with Snow Brand Milk Products of Tokyo, the largest dairy products maker in the country.
As of February 1, both companies will own a half share of the new business, Nestlé Snow.
The new firm will supply the market with four types of products - yoghurts, beverages, desserts and dairy-based drinks - as well as handling marketing.
Snow Brand will look after production and sales for the new company.
Nestlé will take responsible for quality control.
Snow Brand is working to refresh its public image after contaminated milk products made over 14,500 customers sick last summer.
Instant coffee should be the first product to hit the shelves in February.
swissinfo with agencies