LONDON, July 6 (Reuters) - Comcast's Sky has agreed to buy ITV's broadcast channels and streaming service for £1.6 billion ($2.13 billion), creating a leading British entity to compete with platforms such as YouTube, Netflix, Amazon and Disney.

Sky chief executive Dana Strong said the deal, announced on Monday, was a "landmark moment" in the history of British broadcasting.

Just a few years ago, no one would have thought of merging Britain’s largest free-to-air commercial broadcaster with pay-TV company Sky, but the rise of YouTube and streaming giants has threatened the throne of traditional companies.

Regulators and lawmakers will now decide whether to accept the companies' argument that the radical change calls for more flexibility in the way deals are valued.

Analysts say that the merger of ITV's public service channels and pay-TV leader Sky would account for about 70 percent of the advertising market in Britain's traditional television broadcasting sector, including contracts with third-party broadcasters.

The traditional television broadcasting sector is experiencing a structural decline as audiences shift to live streaming and digital content.

Strong said the deal would ensure "excellent British programming" in a rapidly changing world, with ITV remaining "a public broadcaster at the heart of British life."

ITV shares rose 1.2 percent to 83 pence on Monday.