Albums will be offered in both formats at the same price.
Eric Nicoli, EMI's chief executive, said: "It is key to unlocking and energising the digital music business."
While iTunes will be the first site to offer the DRM-free downloads, EMI has not signed an exclusive deal with Apple and Nicoli said that the company's music would be made available elsewhere.
Steve Jobs, Apple's chief executive, has been lobbying record companies to remove anti-piracy software, and said he hopes to offer half the tracks currently available on iTunes in a DRM-free format by the end of the year.
"Doing the right thing for the customer going forward is to tear down the walls that impede interoperability," he said.
Jobs declined to comment specifically on whether he had held discussions with other big music companies.
James McQuivey, an analyst at Forrester Research, said he expected the other three music giants - Sony BMG Music Entertainment, Universal Music Group, and Warner Music - to follow EMI's lead within a year.
Analysts say lifting software restrictions could boost sales of online music, which currently account for around 10 per cent of global music sales.
However, the Beatles catalogue was not part of the deal.