Vodafone said on Monday it would give away Google's first own-branded phone for free to customers who take out a two-year, 35 pounds ($54)-per-month contract. Price plans will start at 25 pounds per month.
Google is also selling the Nexus One, made by Taiwan's HTC, directly to consumers, shaking up an environment where carriers normally control customer relationships.
The Nexus One offers popular and new Google services including satellite navigation and voice-activated search, as well as access to more than 40,000 software applications that users can download to customize their phones.
The Nexus One is one of many phones built by third parties on Google's Android software, which is rapidly gaining in popularity since being launched just over a year ago.
Android took 9 percent of the U.S. smartphone market in February, according to technology research firm comScore, behind BlackBerry maker Research in Motion, Apple and Microsoft.
(Reporting by Georgina Prodhan; Editing by David Holmes)