More than 15,000 films and TV episodes will be available to customers who sign up for its Prime Instant Video service.
The move will be seen as a direct rival to streaming service Netflix, which has been a critical and commercial success - notably with its Kevin Spacey remake of UK drama House Of Cards.
The new creation is a combination of the current Prime service, which offers next-day delivery and a Kindle library, with streaming service LoveFilm, which Amazon owns.
Viewers will be able to rent or buy films and TV shows, including The Walking Dead and Vikings, on devices including iPads, Kindle Fire, Xbox and smart TVs.
The service, which costs £79 a year, also allows viewers to watch original Amazon shows, such as political drama Alpha House. It launches next Wednesday.