Vattenfall said building of the site, some 70 kilometres (43 miles) off the German island of Sylt, near Denmark, would start in 2012 and be completed in 2014.
The farm is set to have a capacity of 288 megawatts, enough to supply power to 500,000 households, making it one of the main offshore projects in the world.
The "Dan Tysk" joint venture will be held at 51 percent by state-owned Vattenfall, and at 49 percent by SWM.
In September, the Swedish company inaugurated what is currently the world's largest offshore wind farm off the English coast.
Vattenfall, which has been widely criticised in Sweden for running heavily polluting coal plants, especially in Poland, said last month it would implement a new strategy aiming to reduce carbon dioxide emissions.
The company is Europe's fifth largest electricity producer its largest supplier of urban heating.