Users will need to install the latest versions of Yahoo and Live messaging software to make connections. The companies said the programs would be available for free download from their websites.
The rival Internet firms had been testing the message system link since July with "beta" software released on a limited basis.
The Yahoo-Microsoft alliance signaled a continued erosion of walls dividing users of IM and mobile telephone text messaging services, according to lead analyst Matt Rosoff of Directions on Microsoft.
Rosoff predicted that people would be see their instant messaging and telephone text messaging work together better in the years ahead.
Earlier this years, Microsoft enabled Windows Live users to send text messages to Vodaphone customers in Europe.