The launch marks the latest stage of BT's strategy to re-establish itself on the high street by offering a range of broadband-enabled products, and is being co-ordinated through its new High Street division.
The device, the Philips Streamium MC-i250 hi-fi, will be sold with a BT wireless broadband modem online and in three House of Fraser Stores in London, Essex and Manchester at £499.99. It will enable users to stream MP3 music downloads and online radio stations via broadband to any room in their house.
BT will also launch its own digital media player, expected on the high street early next year. It is understood to be in talks with retail chains about rolling out the player.
BT's expansion onto the high street is key to plans to develop revenue away from fixed telephony, where it faces competition from entrants including Tele2 and One.Tel.