Unveiled today, the Amazon Cloud Drive offers 5GB of free online storage for music, while the Amazon Cloud Player allows users to listen to songs via web browsers or mobile apps.
The service is currently available on Blackberry, Palm and Android mobiles, but there is currently no support for Apple's iOS operating system on iPad, iPhone or iPod Touch.
Music lovers will be able to use the service to upload their music library, including any tracks purchased from Apple's iTunes, as well as buy new songs for digital playback.
The cloud drive is free to all Amazon account holders, starting with 5GB of storage space that can hold around 1,000 songs. In an introductory deal, anyone buying an MP3 album from Amazon will be automatically upgraded to a free 20GB cloud drive account for one year. Otherwise, the 20GB storage will cost $20 (£12.50) a year.
"Our customers have told us they don't want to download music to their work computers or phones because they find it hard to move music around to different devices," said Bill Carr, the Amazon vice-president of music and movies.
"Now, whether at work, home, or on the go, customers can buy music from Amazon MP3, store it in the cloud and play it anywhere."
Apple is expected to launch an improved cloud storage offering as part of plans to revamp its MobileMe service. Google has also previously demonstrated a cloud music service that can stream music tracks to different devices, but that has yet to launch.
Sony already offers the Music Unlimited service, a cloud-based, on-demand facility available on Bravia and Blu-ray connected devices, as well as PS3 consoles and VAIO computers. Subscribers pay around £4 a month to access the service.
Amazon said that it has managed to ease legal uncertainties among users about uploading music from their computers, some of which might have been downloaded illegally, by offering a cloud service more akin to an external hard drive.
The company is also confident that it does not need licensing agreements with record labels to store users' music in the cloud, although the MP3tunes digital music locker service has previously suffered legal challenges for a similar arrangement.