The signing of the agreement this week reflected the organisations' shared mission of making learning accessible to all, said Sir John Daniel, OU vice-chancellor, and Dr Anne Wright, UFI chief executive.
"By sharing our expertise and co-operating on research and development, we can create learning pathways for adults to progress across a range of educational levels and to gain recognition for their achievements. Such a network is vital if the Government's aims for lifelong learning are to be realised," says Sir John, who also sits on the UFI board.
Dr Wright said their complementary missions and good working relationships would help make Britain a world leader in flexible and lifelong learning and the application of new technologies.
The memorandum will help the organisations to find the best ways of working together, perhaps developing collaborative projects. They already cross-refer callers to their information and advice lines, and the OU is an approved supplier of learning materias for the UFI's Learndirect venture.
The UFI, through Learndirect, concentrates on e-learning and has more than 190,000 people signed up to its vocational and basic skills-focused courses.
The OU is no stranger to technology, with 12 courses taught fully online and between 100 and 150 - around half the total - with some element of e-learning.
An OU spokesperson said the number of online courses - which were more flexible for learners and cheaper to deliver - would continue to grow.
One example is its new online "flexible PGCE" being introduced next year that will offer people nine staff dates throughout the year. Each student will be individually assessed to give credit for any prior learning, reducing the amount of time needed to complete the postgraduate teaching course.
Ms Benwell said the agreement did not mean that a merger between the two organisations was on the cards. Although their missions were similar, she said the UFI was a broker working through partnerships and had no aspirations to become an awarding body like the OU.
Learndirect is at: www.learndirect.co.uk, The Open University is at: www.open.ac.uk