Each company will invest 3 billion yuan ($483.3 million) and will have a 50% share in the new company, to be called Koubei.com, the companies said.
Koubei, which means 'reputation', will initially focus on deliveries of food and drink using Alibaba's established Taidiandian food order and delivery brand. Users will be able to access Koubei through both Ant Financial's Alipay Wallet app and Alibaba's Mobile Taobao app.
Ant Financial's merchant services in offline retail, healthcare and vending machines will be brought in to the business once it is established, the companies said.
"Consolidating our resources under Koubei allows us to capture opportunities that navigate both the offline and online markets," said Samuel Fan, chief executive of Koubei. "Harnessing the power of mobile commerce and data technology, Koubei will build synergies between offline consumption and internet-based offerings that will transform China's local services market."
Ant Financial Services is affiliated with Alibaba. It runs an online payment platform, Alipay, and a money market fund, Yu'e Bao. This month it received approval to launch an online-only bank called MYbank.