The new alliance will initially focus on two key priorities, including development of drug-device combinations and delivery of care management services to improve adherence and simplify insulin treatment, as well as help people with diabetes better manage their condition.
It will be structured as an open-innovation model, leveraging the capabilities, as well as the human and financial resources, of the two companies.
Based on the two initial priorities, the companies may explore other areas for potential collaboration.
Sanofi executive vice-president of global divisions and strategic development Pascale Witz said: "There is no day off in managing diabetes, and lack of adherence is one of the major hurdles to optimal disease management.
"That is why Sanofi is committed to developing integrated care solutions that focus on making life easier for people with diabetes and improving clinical outcomes that may help reduce costs to the overall healthcare system.
"Through this important collaboration, Sanofi will tap into technology advances that aim to create holistic treatment solutions which take into account the individual patient’s needs."
The new alliance will combine Sanofi’s insulin portfolio and drug development skills with Medtronic’s specialism in insulin pumps and continuous glucose monitoring.
Medtronic chairman and chief executive officer Omar Ishrak said: "We believe there is tremendous opportunity to better align care across the diabetes care continuum through new and varied technologies and patient care management strategies.
"Medtronic is committed to taking a broader approach, expanding beyond our core strength in type 1 diabetes, to co-develop an array of technologies and patient services that will deliver superior clinical outcomes at an affordable price.
"We also know we can’t do it alone, so we are particularly excited to join in this effort with Sanofi who, like us, is committed to exploring new avenues and approaches to solving the challenges associated with diabetes."