With more than 15 million active users per month, LastFM has earned glowing praise for its system which recommends songs by tracking a listener's music-playing habits and automatically linking them to fans with similar tastes.
The deal with Warner, the world's fourth-largest music company, is the first with one of the major labels. The network's co-founder, Martin Stiksel, said LastFM is in talks with the other three major labels and content holders.
Warner, home to Madonna and Red Hot Chili Peppers, said the deal underscored its commitment to offering consumers unique ways to experience its music.
Stephen Bryan, who looks at business development for Warner Music Group, told Reuters that LastFM reflected a broader trend that showed the power of community-driven services.
"This will help us harness that power for consumers," he said.
LastFM was launched in 2002 but rose in popularity in 2005 when it developed a new method for connecting people with music and artists with listeners.
Music fans who sign up at LastFM can agree to link their digital media player, such as Apple's iTunes, for example, to LastFM's site, which then monitors the choice of music.
With this information, it can then recommend new or old songs, artists or local concerts, drawing from the choices of other fans who have similar tastes.
The network also provides a free, advertising-supported online personalized radio-streaming service which will play music from the hundreds of independent labels it has deals with.
"It is very difficult to keep up to date with all the new music that is coming out," Stiksel told Reuters in an interview. "Being confronted with too much choice can actually be daunting, and you go back to listening to the same old stuff.
"What we wanted to do was make music discovery very simple. This is the first major content deal we have done, and this is the official stamp of approval," he added.
The company said the service had also been popular with independent labels and artists who use it to target new fans.
LastFM said the deal would allow Warner's music to be offered over its service in the U.S. and Europe and would roll out in full over the next week.
LastFM's biggest markets are the United States, Britain, Japan, Germany, Poland, Brazil, Turkey and Finland, where 8 percent of Finnish Internet users are LastFM users.