The label, dubbed Music With A Twist, plans to employ talent scouts nationwide to find emerging artists who have generated a buzz in the gay community and have the potential for mass appeal.
Financial terms of the deal were not disclosed.
The recordings will be released in a marketing partnership with the Sony Music Label Group, which includes Columbia Records Group, Epic Records, Sony Nashville and Sony Urban Music.
"It's a home that says to artists, 'We not only are OK with who you are, but we embrace that as part of your identity,"' said Matt Farber, president of Wilderness Media & Entertainment and founder of Logo, the MTV Networks channel targeting gay audiences.
Farber compared the concept of a record label focusing on gay artists with that of urban labels formed to nurture rap or hip-hop acts.
Twist plans to sign artists covering a variety of musical genres and also release compilations with songs by established artists.
Sony Music has also agreed to become a charter sponsor of a syndicated radio show produced by Wilderness Media and dubbed Twist that is launching this weekend in several markets and online.