Madonna is leaving her long-time label Warner Bros for a £60 million deal with a concert promoter.

Under the terms of the deal, reported in the Wall Street Journal, Madonna will dump Warner in exchange for a mix of cash and shares in concert promoter Live Nation. It will distribute three studio albums, promote concert tours, sell merchandise and license her name. The deal effectively makes Live Nation Madonna's business partner.

Concert tours are a major earner for the singer who was ranked fourth on the list of the top acts last year, with North American ticket sales of £43million.

Madonna, 49, has been with Warner Bros since her 1983 debut album.

The agreement is further evidence that traditional record companies are becoming irrelevant to big artists, with online music killing off the need for many of their services. The industry is also fighting a losing battle against internet piracy. Record companies argue that profits fund the process of finding and nurturing new talent. But artists claim record company executives are paid far too much.

News of the Madonna deal comes just after Radiohead launched its new album directly to the public with a system where people could pay what they thought it was worth. Joni Mitchell and Sir Paul McCartney recently signed deals with Starbucks label Hear Music, giving the coffee chain the right to play and distribute their music in its stores.

Guy Hands, whose Terra Firma private equity group controls EMI, has warned his own company and the industry in general that they risk annihilation.

He said record labels needed to let the CD go and embrace digital "opportunities" if they are to survive.