T-Systems, Telekom's IT division, will run the network and manage cloud storage data in project "Open Telekom Cloud", using Huawei servers and solutions expertise.
The Chinese firm will not have access to the data, Telekom said in a statement following the inking of a cooperation agreement with its partner Thursday night.
The German firm is seeking to consolidate its leading position in the European cloud - or online - services market.
The Open Telekom Cloud is scheduled for launch at next year's CeBIT technology fair as Deutsche Telekom focuses on a market segment largely dominated by US firms such as e-commerce giant Amazon's Amazon Web Services subsidiary.
Shengli Wang, Huawei's European president and board member, said in a statement on Deutsche Telekom's website that "with T-Systems as a partner, we are looking forward to further build a strategic cooperation with one of the leading ICT providers in the world".
For T-Systems IT division director Ferri Abolhassan, "more and more business customers are discovering the advantages of the public cloud, but they want a European alternative."
He told German business daily Handelsblatt that "we want to attack Amazon."
Anette Bronder, director of T-Systems' Digital Division, said the new platform "is designed to be simple, secure, and affordable."
To date, customers have generally used a specially secured private cloud on a company by company basis on a dedicated server.
Deutsche Telekom says it sets great store by clients' data security and is stressing that the servers are Germany-based, bringing them under strict local data management regulations.
Amazon itself recently opened two cloud data centres in Germany – adding to a first European site in Dublin.
Deutsche Telekom said it aims to double cloud revenues for business customers by the end of 2018.
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