Under the deal, Imagination will design vertically integrated radio and television products for multi-entertainment platforms, according to Brett Blundy, chairman of Sanity.com.au.
One of Sanity's first offerings would be a "world-first" interactive radio and television-based Top 40 countdown product streamed over 800 stations globally, Blundy said.
The agreement was "not just about online content as you know it", he stressed.
"We are not going to head down a one-dimensional online radio or TV model which we all know is a long bow -- and there have been some classic fast cars heading towards brick walls with casualties already," he mused.
Nor was the venture a mere ratings or sales push by Australia's leading music retailer, Blundy added. He insisted the deal was aimed squarely at creating "maximum consumer entertainment", and therefore more "direct" relationships with customers.
Sanity.com will license Imagination's interactive technology, WebChoice, to users, giving them access to its website.
WebChoice "transforms radio and television into a full interactive and multimedia experience" via a PC or laptop. The technology controls a remote server which drives the PC browser in sync with a traditional broadcast, according to a company statement.
Blundy declined to disclose any financials on the deal, only hinting that Sanity.com had made "substantial but sensible" investments in it and would "leverage" Imagination's technology assets.