In a statement, the Internet giant said the Digital News Initiative would "support quality journalism (through) technology and innovation."
The initiative brings together Les Echos in France, Germany's FAZ, the Financial Times, The Guardian, NRC Media in The Netherlands, El Pais in Spain, La Stampa in Italy and Die Zeit in Germany as well as European media organisations.
The partners will focus on product development, supporting innovation as well as training and research.
They will also set up a working group to "increase revenue, traffic and audience engagement", said the statement.
Google will inject $160 million (roughly Rs. 1,014 crores) into the project to promote new ideas in digital journalism.
The Mountain View giant has had a difficult time in Europe in the recent past, with numerous antitrust probes looking into abuse of its dominance in search and mobile spheres. Google has also been forced to adopt the recently legislated 'Right to Be Forgotten' law, as well as accept 'Google Taxes'.
The Google Tax has seen Google battling publishers in various European countries that accuse it of abusing its dominant position and demand it pay for using their content. Media groups cited new laws passed in their countries requiring news aggregators such as Google and Yahoo to pay for the content they display in search results and in such portals as Google News.
Prominent battles that saw Google withdraw its services to comply with local laws include one in Germany where the search giant was made to stop displaying snippets and thumbnails from German sites in its results, while the other in Spain saw the firm shut down the Google News service in the country.
Written with inputs from AFP