Cruise was named the world's most powerful celebrity earlier this year

The move will see Cruise produce at least four films a year as well as taking an unspecified stake in the company - known for nurturing talent.

It comes three months after he severed ties with Paramount Pictures after a 14-year working relationship.

Paramount said that Cruise's recent behaviour had been "unacceptable".

It is believed that Cruise's high-profile relationship with Katie Holmes and his views on subjects such as anti-depressants were behind the fallout with Paramount.

'Biggest star'

Cruise's business partner at Paramount, Paula Wagner, is also moving to United Artists as its chief executive officer.

"We were looking for a strategic partner (for UA) and we've found a strategic partner and it just so happens that he's the biggest star in the world," said MGM spokesman Jeff Pryor.

During the past decade, Cruise's films - which include the three Mission: Impossible movies - have generated more than $2bn (�1.5bn) worldwide.

But the third Mission: Impossible film put in a relatively disappointing performance at the box office.