Luxury jeweler Tiffany and Co has today announced a major deal with the world's biggest watch manufacturer, Swatch.

The tie-up will see Tiffany discontinue some of its current range of watches, which are available in materials ranging from platinum and gold to stainless steel.

A new company will be set up, owned by Swatch, selling watches under the Tiffany brand, manufacturing existing Tiffany watch designs and opening up new stores.

It has not been confirmed whether the new brand will be a "budget" Tiffany or whether it will continue to produce gold, platinum and diamond watches retailing at prices of up to tens of thousands of dollars.

Whether the new firm's products will also be sold in the famed Tiffany blue boxes has also yet to be announced.

While best known for its plastic watches, Swatch already owns some of the world's most prestigious timepiece brands, including Omega and Breguet.