YouTube said Tuesday that it had sealed a licensing agreement with the world's largest music label conglomerate Universal as the video behemoth explores creating a new streaming service.

YouTube, which is part of Google, said it reached a long-term agreement with the Universal Music Group, months after a deal with competitor Warner Music.

A joint statement did not specify the terms but hinted that the agreement would address compensation by YouTube, a constant source of irritation within the music industry.

"This important step forward provides our recording artists and songwriters improved content flexibility and growing compensation from YouTube's ad-supported and paid-subscription tiers," Universal chairman and CEO Lucian Grainge said in the statement.