While joint projects between the two companies isn't a new concept - brands under the Volkswagen Group umbrella have been sharing components and technologies for years - Audi and Porsche are looking towards 2025, where electrification and autonomy will be prime focuses of mobility.
Rupert Stadler, chairman of the board of management at Audi AG, said: "The best brains of both companies will together set the technical course for the future".
"We are united by many shared values, above all, by our pursuit of the best solutions and the best offerings for our customers."
Above: Audi e-tron quattro concept
Meanwhile, Porsche chairman Oliver Blume, said both firms will still maintain the clear differentiation between the brands.
"We will cooperate wherever it makes sense," he said. "A Porsche is always a Porsche, and that will remain so in the future."
This latest move is likely part of the Volkswagen Group's broader push towards electrification, following the 'Dieselgate' emissions saga, with the Volkswagen brand alone planning no less than 30 electric or electrified models by 2025.
Meanwhile, Audi has gone on record saying it plans to launch a new electrified vehicle every year from 2018. Additionally, Porsche recently confirmed it will produce the all-electric Mission E sedan (above) - which it revealed at the 2015 Frankfurt motor show.
Audi and Porsche also offer a range of plug-in hybrid versions of their current models in Australia, including the Audi A3 e-tron, Porsche Cayenne S E-Hybrid along with the Panamera E-Hybrid and S E-Hybrid.