Napster creator Shawn Fanning has struck a deal with music giant Sony BMG to use his Snocap tracking system.
Former Napster creator Shawn Fanning was reviled by music labels
Snocap is a copyright management and filtering system that allows users to trade legitimate songs over peer to peer networks.
Napster, one of the first file-sharing systems, was shut down after US judges said it was breaking copyright law but has re-launched as a legal service.
Snocap has already signed a deal with Universal and is in talks with EMI.
Snocap is a range of tools that lets songs be identified as they are swapped online. The swapping of legitimate songs then allows record firms to charge for the music.
"The internet will become a much richer resource for music fans everywhere," said Shawn Fanning, commenting on the deal.
He added: "This is an important step toward the growth of a digital marketplace where consumers can discover, share and purchase music from massively deep, almost infinite catalogues."
Record labels view the technology as a way to turn peer-to-peer networks into profitable distribution tools.
The current model of online music distribution is expensive - relying on large, costly servers, requiring huge amounts of bandwidth to serve potentially millions of people.
Utilising peer to peer networks would be an inexpensive system of distributing music to customers.
Peer to peer firms will be able to plug Snocap's tools into their networks so that legal song swapping can take place.
Terms of the Sony BMG deal were not disclosed, but the record label said it had already started to register its content with Snocap's copyright management interface.
Snocap's technology "will help to curb copyright infringement, and will facilitate the creation of legitimate, authorised peer to peer services," said Thomas Hesse, president of SonyBMG's global digital business division, said in a statement.
At least one company, called Mashboxx, is planning to launch a service based on Snocap later this year, reported technology site Cnet.