Under the deal, Square will pay $297 million in cash and stock for Tidal, Jay-Z will be named to Square's board of directors, and he and other artists who currently own shares in Tidal will remain stakeholders.

Tidal will operate as a distinct entity alongside the point-of-sale hardware and software offerings of San Francisco-based Square, the payments company founded by CEO Dorsey, who is also co-founder and chief executive of Twitter.

Tidal has presented itself as the artist-friendly alternative to other music streamers, and Square says it will take that phenomenon further for musicians just as it has for businesses with its financial systems.

Jay-Z's TIDAL was sold to Jack Dorsey's Square, Inc.

“It comes down to one simple idea: finding new ways for artists to support their work,” said Dorsey in announcing the news. “New ideas are found at intersections, and we believe there’s a compelling one between music and the economy. I knew TIDAL was something special as soon as I experienced it, and it will continue to be the best home for music, musicians, and culture.”

"I said from the beginning that TIDAL was about more than just streaming music, and six years later, it has remained a platform that supports artists at every point in their careers,” added Jay-Z, whose real name is Shawn Carter. “Artists deserve better tools to assist them in their creative journey. Jack and I have had many discussions about TIDAL’s endless possibilities that have made me even more inspired about its future. This shared vision makes me even more excited to join the Square board. This partnership will be a game-changer for many. I look forward to all this new chapter has to offer!”