The US online movies subscription giant plans to expand in the UK and Ireland in early 2012, taking on the Amazon-owned LoveFilm.
Under a multi-year licensing agreement, Netflix will become the exclusive subscription streaming service in the UK and Ireland for most first-run MGM films.
During the pay-TV window (in which Sky Movies shows new release films), Netflix will be able to offer new MGM titles on connected TVs, games consoles, computers and mobile phones.
Appearing exclusively on Netflix within one year of their theatrical release will be The Hobbit: An Unexpected Journey and The Hobbit: There and Back Again, the prequels to Peter Jackson's Lord of the Rings trilogy.
Netflix will also offer Zookeeper starring Kevin James, Hansel & Gretel: Witch Hunters with Jeremy Renner and 21 Jump Street featuring Channing Tatum, Jonah Hill and Ice Cube.
Alongside the new movies, MGM catalogue titles such as Capote, Fargo, The Usual Suspects, West Side Story and The Amityville Horror will also come to Netflix UK.
Netflix chief content officer Ted Sarandos said: "We are delighted to be entering the UK and Ireland with a legendary studio like MGM at our side.
"And we are excited to be extending our relationship with MGM from the US to these important markets and proud to be the exclusive home for their films in the traditional pay-TV window."
In a joint statement, MGM co-chairmen and chief executives Gary Barber and Roger Birnbaum added: "We are thrilled to grow our partnership with Netflix as they expand into the UK and Ireland."
Last month, Netflix reported a fall in subscribers in the third quarter of 2011 after customers responded negatively to recent price increases.