Universal, the biggest major label in the world, includes such popular acts as U2, Elton John, the Rolling Stones, Duffy, Kanye West and Akon.
Virgin adds it remains in talks with other labels in an effort to bring more artists into the service.
The downloadable songs will be in DRM-free MP3 and will be available "later" this year.
IFPI Chairman John Kennedy adds of the deal: "It epitomizes the way in which the music business is adapting to the digital world, embracing new business models and responding to the changing needs of consumers," Kennedy said of the new service.
"It also marks new ground in ISPs' willingness to take steps to protect copyrighted content on their networks, and that sets a very encouraging example to the whole industry."
Virgin also added: "We expect the deal will drive a material reduction in the unauthorized distribution of its repertoire across Virgin Media's network."
There was no word on price.