The website, which goes live tomorrow, will encourage users to submit images by camera phone and other digital technology of world events, with a view to them being distributed by Reuters to print, online and broadcast media companies.
Yahoo! and Reuters have said that increased demand for user-generated content material by the media industry prompted them to create a "citizen journalism" website to meet current demands.
Reuters will screen all material for authenticity before it is distributed to various media clients for use. Payment will be considered for submissions that are eventually used by media outlets.
Chris Ahearn, president of Reuters Media, said: "There is an ongoing demand for interesting and iconic images. This is looking out and saying, 'what if everybody in the world were my stringers?'"
Ahearn added that discussions between Yahoo! and Reuters were ongoing, and that they were in the early stages of "exploring how a compensation system would work".
The deal follows last month's launch of BBC News 24's entirely user-generated content service programme 'Your News', which runs a weekly round-up of the thousands of emails and correspondences it receives each week.
The corporation has also recently firmed up its official guidelines for journalists on how to handle user-generated content material, and is considering payment for what it describes as anything that it regards as "particularly editorially important or unique".
Images and footage of the July 7 bombings in London from members of the public led to thousands of submissions being sent to UK broadcasters, including the BBC and Sky.
Reuters has already made a $7m investment in Pluck, a social media website that distributes blogging and newspaper content to media outlets.
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