The South African firm will hold an initial 51% stake while the London-listed Firestone will hold 49% in the new venture, a De Beers statement in Johannesburg said on Monday.
"Under the terms of the joint venture agreement, De Beers will be responsible for financing and carrying out all exploration and evaluation work," it said.
"Upon completion of the first bankable feasibility study, De Beers interest will rise to 61%."
The exploration centred around the Mopipi project, about 450 km north of Gaborone which lay adjacent to De Beers' Orapa and Letlhakane diamond mines.
"The Mopipi project covers an area of approximately 3200 sq km, making Firestone the largest holder of diamond exploration rights in the Mopipi and Orapa areas," the statement said.
"Under the terms of the joint venture agreement, De Beers will be responsible for financing and carrying out all exploration and evaluation work"
De Beers is to shortly commence an intensive exploration and evaluation programme.
"The first phase of work will comprise the integration of data from exploration carried out by Firestone with De Beers' extensive geological database from more than 30 years of exploration and mining in the Mopipi and Orapa areas."
Landlocked Botswana is the world's largest producer of gem-quality diamonds, which in 2002 accounted for 77% of its earnings and 45% of its gross domestic product.
The country's diamond industry is controlled by Debswana, a company formed in 1969 as a partnership between De Beers and the Botswana government.
It is an equal partnership, but Botswana's government imposes a 25% tax on De Beers, which grants it an effective 75% of the profits.