The announcement comes less than a year after managing director James Daunt called the online retailer "a ruthless money-making devil".
But then Daunt may just have realised that the "money-making" part is what was missing from Waterstones - a pretty crucial bit. So this could be a case of the high street chain realising that they'll never be able to compete with the online giant. Why not, then, just join up with them and hope some of the magic will rub off on them? If you can't beat 'em, join 'em.
The agreement will see Waterstones selling the full range of Amazon Kindle e-readers and other digital offerings. It's all part of a major makeover for the retail chain, which will also include the installation of Wi-Fi zones, allowing customers to browse "real" books before downloading to their Kindle. Obviously they will also benefit from the expert advice that's already available in-store.
In a video posted on YouTube Daunt explained the move by saying, "We needed to solve the digital question". He believes combining the popular digital readers with an old-fashioned browsing experience could win customers over.
Up until recently old school retailer Waterstones had plans to develop their own readers; they even announced last year that they were planning to release an own brand digital reader this year. At one stage they were in talks with US chain Barnes and Noble about bringing its Nook reader to the UK. For whatever reason they decided to plump for this option instead.
The partnership will be formally launched in the Autumn and it is unknown what kind of commercial terms are in place for the deal.
While the move appears a capitulation on the part of Waterstones, at the heart of this agreement sits the notion of giving your customers what they want and it is clear that readers have fully embraced the convenience of the Kindle. Any retailer with a bit of sense should at least give the customer a choice.
Whether customers actually want this experience, remains to be seen but for now this looks like Waterstones could have made a shrewd move for the sake of their customers - and for the sake of its own future.