GSK will provide £15 million (18 million euros, $23 million) over five years to train healthcare workers and fund Save the Children community projects in the Democratic Republic of Congo and Kenya.
The charity will take a seat on a new GSK board overseeing its paediatric research and development "to accelerate progress on innovative life-saving interventions for under-fives" and widen access in the developing world, they said in a joint statement.
Save the Children admitted the tie-up would be controversial given criticism -- that it once voiced -- that the pharmaceutical giant charges too much for its drugs in developing countries.
"In the past Save the Children may not have embarked on a collaboration with a pharmaceutical company like GSK," Justin Forsyth, chief executive of the charity, admitted.
"But we believe we can make a huge difference if we harness the power of GSK's innovation, research and global reach."
Under the partnership, GSK will look into reformulating the antiseptic chlorhexidine, currently found in mouthwash, into a product that could be used to cleanse the umbilical cord stump on newborn babies.
Studies from South Asia suggest this could prevent up to one sixth of newborn deaths in high-risk areas, Save the Children and GSK said.
The pharmaceutical company will also step up the distribution of an antibiotic in powder form that could treat childhood pneumonia, which currently kills 1.4 million under-fives globally.
Save the Children's on-the-ground expertise will be vital in deciding how such products can be distributed, from the language on the packaging to the weather and conditions in the target areas, the company said.
GSK will fund the development of the products and said it would sell them at cost price.
"A partnership of this scale gives us an opportunity to do something amazing -- to save the lives of one million children and to transform the lives of millions more," said GSK's chief executive, Andrew Witty.
The £15 million includes £1 million to be raised by GSK employees, and will see £9 million given to projects in DR Congo and £4 million for projects in Kenya.
Rohit Malpani, director of policy for Medecins Sans Frontieres, said: "The real understanding of how effective this partnership is, is whether or not companies like GSK put access to medicines at the heart of their business models."
Malpini said that although drugs companies had improved their pricing practices over the past decade, it was a small step from a very low base.
"People are still paying too high prices, innovation has not truly changed to benefit low-income countries," he told AFP.