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The device, which can be connected to TVs, is available for pre-sale on Alibaba's shopping site Tmall.com for $125 which will include a year's subscription to the service called DisneyLife.
Users in the world's second-largest economy will be able to stream movies, play games, read e-books and listen to songs from Disney. All that is needed is an internet connection. Subscribers can also buy Disney merchandise and plan a visit to Disneyland in Hong Kong and Shanghai Disney Resort when it opens in 2016.
For Disney, the deal is a bid to shore up sales in a big market but also access Alibaba's massive user base.
And for Alibaba, the move marks a continued efforts to push beyond e-commerce into areas such as cloud computing and media. The Chinese giant last week announced it was buying Hong Kong's South China Morning Post newspaper. And earlier this year it acquired a YouTube-like video service called Youku Tudou.
It comes as Chinese internet giants including Baidu and Tencent have been striking deals with entertainment and movie companies in a bid to offer an increasing number of services to users.
Disney has been looking at new ways to distribute its content in other markets too. In the U.S. Disney announced a deal that sees Sony's PlayStation Vue internet TV streaming service carry its channels including ESPN and ABC. And in the U.K. Disney launched a streaming service to give consumers direct access to its content.
Disney is trying to tap into to the increasing number of so-called "cord cutters" -– users that shun traditional cable subscriptions for services such as Netflix. Disney is not the only company to go directly to consumers. TV networks HBO and Showtime both have their own internet streaming services.