Carey was married to Sony president Tommy Mottola

"Despite offers from many of our competitors, we are delighted that Mariah has chosen Island as the place to begin the next phase of her unprecedented career," said Lyor Cohen, president and chief executive of Island/Def Jam.

Carey has already begun recording an album for the new company, which is home to the artists Jay-Z, Willie Nelson, Ryan Adams, Ja Rule and Ashanti.

Island/Def Jam beat at least two other companies - Elektra and J Records - in bidding for the singer.

Her associate Jerry Blair said that Carey, who underwent treatment for an emotional breakdown in August, was "doing just incredibly well."

'Legacy'

He said Carey's new label, as yet unnamed, would sign other artists besides her.

Carey has also created a media company to handle publishing, film production and other projects.

"Setting up this company for her is really guaranteeing her legacy," said Mr Blair.

The singer has also made a new film, Wise Girls, with Oscar-winner Mira Sorvino.

The film was shown at the Sundance film festival, and will be broadcast on US cable network HBO in the autumn, according to Mr Blair.

Carey was a huge commercial success for Columbia Records (part of Sony) when she made her self-titled debut for the label in 1990.

However, Carey fell out with the label after her divorce from Sony Music President Tommy Mottola, who had managed her career as president of Columbia.

Her subsequent deal with Virgin /EMI was reportedly worth as much as �70m and produced just one album, Glitter, which sold two million copies worldwide - healthy enough for many artists, but a flop by Carey's blockbuster standards.

In January, Carey left EMI with a �19m payment to void her contract and has since been in search of a new record deal.